Motorola Reports Second-Quarter Financial Results

SCHAUMBURG, Ill., July 30 /PRNewswire-FirstCall/ --

    --  Second-quarter sales of $5.5 billion
    --  Second-quarter GAAP earnings from continuing operations of $0.01 per
        share, including net income of $0.02 per share from highlighted items
    --  Total cash of $6.5 billion, a sequential increase of $360 million
    --  Increased cost reduction plan by $100 million; now expect total cost
        savings of $1.8 billion for 2009
    --  Home and Networks Mobility sales of $2.0 billion; operating earnings of
        $153 million
    --  Mobile Devices sales of $1.8 billion; shipped 14.8 million handsets;
        operating loss of $253 million, improved by 50 percent sequentially
    --  Enterprise Mobility Solutions sales of $1.7 billion; operating earnings
        of $227 million

Click here to view the financial tables that are an integral part of this release.

Click here to view additional financial information.

Motorola, Inc. (NYSE: MOT) today reported sales of $5.5 billion in the second quarter of 2009. The GAAP earnings from continuing operations in the second quarter of 2009 were $26 million, or $0.01 per share. The GAAP earnings from continuing operations includes net income of $0.02 per share from highlighted items, which are outlined in the table at the end of the press release.

Total cash* at the end of the second quarter was $6.5 billion, an increase of $360 million compared to the end of the first quarter. The Company generated $150 million of positive operating cash flow during the quarter and expects to continue to generate positive cash flow in the second half of the year.

Greg Brown, co-CEO of Motorola and CEO of Broadband Mobility Solutions, said, "In Broadband Mobility Solutions, we continued to lead in our key markets and delivered solid results in a very challenging economic environment. We further reduced our cost structure, improved our operating margins and decreased inventory on a sequential basis. We also continued to focus our R&D efforts on innovation in areas such as next-generation public safety, enterprise mobile computing, enhanced broadband video and 4G wireless."

Sanjay Jha, co-CEO of Motorola and CEO of Mobile Devices, added, "We have agreements in place with carriers and remain on track to bring our new smartphone devices to market for the holiday selling season. We are also excited about our 2010 portfolio and are pleased with the customer feedback. In Mobile Devices, we improved the operating loss, reflecting a lower cost structure, and substantially reduced cash consumption as compared to the first quarter."

Operating Results

Mobile Devices segment sales were $1.8 billion, down 45 percent compared to the year-ago quarter. The GAAP operating loss was $253 million, compared to an operating loss of $346 million in the year-ago quarter. The segment reduced its operating loss by 50 percent sequentially from $509 million in the first quarter of 2009.

Mobile Devices highlights:

    --  Shipped 14.8 million handsets; estimated global handset market share of
        5.5 percent
    --  Continued progress on differentiated smartphone devices targeted to
        launch in the fourth quarter of 2009
    --  Launched the CDMA Rival(TM) A455, a side-slider with one-touch messaging
        access and QWERTY keyboard; and the 3G Karma(TM) QA1, a slide-out QWERTY
        with one-click access to Facebook and MySpace
    --  Launched the iDEN Clutch(TM) i465, Motorola's first device that combines
        the power of push-to-talk and the convenience of a QWERTY keyboard

Home and Networks Mobility segment sales were $2.0 billion, down 27 percent compared to the year-ago quarter. GAAP operating earnings were $153 million, compared to operating earnings of $245 million in the year-ago quarter.

Home and Networks Mobility highlights:

    --  Shipped 3.7 million digital entertainment devices
    --  Launched the world's first retail DOCSIS(R) 3.0 cable modem
    --  Surpassed cumulative WiMAX CPE shipments of 650,000 units
    --  Announced an all-fiber enterprise passive optical LAN solution designed
        to reduce network cost and complexity

Enterprise Mobility Solutions segment sales were $1.7 billion, down 17 percent compared to the year-ago quarter. GAAP operating earnings were $227 million, compared to operating earnings of $377 million in the year-ago quarter.

Enterprise Mobility Solutions highlights:

    --  Shipped APX(TM) 7000, a new portable radio platform for the public
        safety market, which provides multi-band functionality for system
        interoperability and unmatched volume and audio clarity for extreme
    --  Released Capacity Plus software for MOTOTRBO(TM), a digital trunked
        radio solution for enterprise users, greatly increasing single-site
        capacity for critical voice and data communication
    --  Released the world's first TETRA base station supporting TETRA Enhanced
        Data Services with IP-over-Ethernet connectivity
    --  Secured public safety awards from the State of Missouri, German Ministry
        of Interior (Berlin), City of Hamilton in Ontario Canada, and West
        Australian Police

Third-Quarter 2009 Outlook

The Company's outlook for third-quarter earnings from continuing operations is $(0.01) to $0.01 per share. This outlook excludes charges associated with the Company's operating expense reduction initiatives, as well as any other items of the variety typically highlighted by the Company in its quarterly earnings releases.

Consolidated GAAP Results

A comparison of results from operations is as follows:

                                                         Second Quarter
     (In millions, except per share amounts)            2009        2008
     --------------------------------------             ----        ----
     Net sales                                        $5,497      $8,082
     ---------                                        ------      ------
     Gross margin                                                                1,710              2,325
          ------------                                                                            -----              -----
          Operating  earnings                                                                      10                      5
          ------------------                                                                      --                  ---
          Earnings  from  continuing  operations**                                26                      4
          ------------------------------------                                  --                  ---
          Net  earnings**                                                                              26                      4
          -------------                                                                                --                  ---
          Diluted  earnings  per  common  share:
                  Continuing  operations                                                  $0.01              $0.00
                  ---------------------                                                  -----              -----

                Weighted  average  diluted  common
                  shares  outstanding                                                    2,306.4          2,269.5
                ------------------                                                      -------          -------

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