Motorola cuts expectations, re-organizes

Mar 22 2007 - 02:28 AM ET | Motorola

Motorola has revised its first quarter guidance and done some re-organization of C-level executives. Lower than anticipated sales of mobile handsets have sharply affected profits and there will be a net loss for Q1. Shares of Motorola [MOT] dove 5% in after hours trading.

The lowered forecast is in stark contrast to the previous estimates. Investors were looking for earnings of 17 cents a share and Motorola is now saying there will be a loss of 7-9 cents a share. The key handset division will also lose money. Several reasons were given for the shift, including Motorola's focus on margin rather than market share. Moto's competitors haven't been shying away from a pricing battle and in turn have gained market share.

Some of the changes discussed by Motorola include:

  • Expanding deployment of the new Linux/Java OS
  • More advanced devices
  • Simplifying product portfolio

Some executives have been changed around. Greg Brown is now COO and Thomas Meredith will be acting CFO.