Motorola expects Q1 handset loss

Dylan Bushell-Embling
03 Dec 2010
00:00

Motorola's shares dipped on Thursday and analysts cut their targets on word the company expects its soon-to-be spun off mobile division to report a loss in the first quarter of 2011.

Co-CEO Sanjay Jha on Wednesday told investors that Motorola Mobility, which will be split off on January 4, will probably run at a loss in the first quarter as a result of competitive challenges.

Jha, who will head up the new company, hinted that the division will be in for a tough time if US carrier partner Verizon Wireless - a key source of phone sales - finally starts to sell the iPhone, All Things Digitalsaid.

The company is trying to diversify sales in markets other than the US and to carriers other than Verizon Wireless.

Motorola's shares on the NYSE fell 0.44% to $7.97 during Thursday's trading.

Analysts reacted to the news by lowering their targets for the Motorola group. Gleacher & Co cut its Q1 earnings per share forecast to 7 cents per share from 8 cents per share, but maintained a buy rating, Barron'ssaid. RBC analyst Mark Sue reduced his own target to 9 cents from 11 cents, and his full year estimate to 48 cents from 53 cents.

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