Motorola Inc. posted an unexpected profit in the first quarter, as sales of its new phones outdid its own forecasts. It also gave an outlook that was brighter than Wall Street was predicting.
However, it has lost its position as the largest U.S. maker of phones to Apple Inc. Motorola sold a total of 8.5 million phones in the quarter, while Apple sold 8.8 million iPhones. Four years ago, when the Razr was still popular, Motorola sold 46.1 million phones in the first quarter.
The Schaumburg, Ill., company has been trying to turn around that long slide in phone sales by focusing on new smart phones, including the Droid. That strategy is bearing fruit, but too slowly to compensate for the drop in overall phone sales. Motorola sold 2.3 million smart phones in the first three months of the year. It had said it expected to sell less than 2 million.
A year ago, Motorola sold 14.7 million phones in the fourth quarter. The drop in phone revenue in the latest quarter was just 9% -- less steep than the drop in overall unit sales would suggest. Motorola can charge much more for the new smart phones than for run-of-the-mill phones.
As a whole, Motorola earned $69 million, or 3 cents per share in the quarter. In the same quarter a year ago, it lost $231 million, or 13 cents per share.
Motorola had said it expected to post a loss of 1 cent to 3 cents per share for the quarter.
Revenue fell 6.1% to $5.04 billion. Analysts polled by Thomson Reuters were expecting $5.1 billion in revenue.
For the current quarter, Motorola said it expects to earn 7 cents to 9 cents per share. Analysts had been projecting earnings of 3 cents per share.
Copyright 2010 The Associated Press