Motorola, Inc. (NYSE:
MOT) is scheduled to report its Q2 2010 results after the market closes on July 28, 2010. The Company's outlook for the second quarter of 2010 is for earnings of $0.07 to $0.09 per share. This outlook now excludes stock-based compensation and amortization of intangibles expenses of approximately $0.04 per share, as well as charges associated with items of the variety typically highlighted by the Company in its quarterly earnings releases.
Motorola, Inc. is a global leader in providing integrated communications solutions and embedded electronic solutions. They manufacture telecommunication equipment and software for consumers, network operators, and commercial, government and industrial customers.
As for Q1 2010, MOT reported sales of $5.0 billion in the first quarter of 2010. The GAAP earnings in the first quarter of 2010 were $69 million, or $0.03 per share, which compares to a GAAP loss from continuing operations of $291 million, or $0.13 per share, in the first quarter of 2009. First-quarter 2010 GAAP earnings include net income of $0.01 per share from highlighted items, which are described at the end of the press release. GAAP earnings per share also include non-cash expenses for stock-based compensation and amortization of intangibles totaling $0.04 per share in the first quarter of 2010. Further details are outlined at the end of this press release. During the quarter, the Company generated positive operating cash flow of $485 million and ended the quarter with a total cash* position of $8.5 billion.
Analysts' estimates for Q2 2010 range from a low of $0.05 to a high of $0.09, compared to a consensus estimate of $0.08, with number of estimates being 21 and a coefficient variance of 13.45. On July 19, Motorola announced it is selling its Networks biz for USD 1.2B. We expect the deal to close on time by year-end before the spin of Mobility in Q1'10, yet with no breakup fee, there is always the chance of another bidder potentially emerging. NSN is also paying MOT an additional $150M for existing A/R and we estimate MOT could collect as much as another $150 from long-term financing contracts on prior sales for a total sale price, we calculate of close to $1.5B. MOT can achieve higher handset margins with its Android strategy as evidenced by the sustainability of HTC's EBIT margins to date, while the supply chain woes plaguing HTC at VZ should lead to continued share gain opportunity in the near-term in a rapidly expanding Android market. We believe Motorola can sustainably hit a handset EBIT margin of 7%+ up from (9%) in Q1 2010 and our prior 5% as the mix shifts to the higher margin Android devices. Total revenue is likely to amount to $5,406 million, with total operating income coming in at $380 million. Net income is expected to be $127 million and EPS $0.09.
The stock closed $7.86, up 1.42% on July 26, 2010 and most analysts' rate this stock as a relative Overweight with an average price target of $9.
