Motorola profits up 87% on record handset sales

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Motorola, the world’s second-largest mobile phone maker, on Thursday reported an 87 per cent increase in fourth-quarter profits boosted by record handset sales.

Ed Zander, Motorola chief executive, said that “2005 was the year of the RAZR [Motorola’s best selling ultra thin mobile phone]”, and promised “more of the same in 2006 . . . It is only going to get better.”

Net income rose to $1.2bn, or 47 cents a share, from $647m, or 26 cents, a year earlier on sales that gained 18 per cent to $10.4bn.

Despite the strong results, Motorola’s stock fell almost 6 per cent at the start of trading in New York on Friday to $22.92, perhaps reflecting investors’ disappointment that the company did not raise its first-quarter financial forecast.

Mr Zander said he was pleased but never satisfied with the results.

“We never take anything for granted,” he said. However, he added: “To grow a $40bn-a-year company by 18 per cent is pretty good.”

Motorola, which added pink and blue versions of the hugely popular RAZR to its line-up during the quarter and launched a total of 26 new handsets, said it sold a record 44.7m mobile phones during the quarter, including about 13m RAZRs or other phones such as the PEBL and SLVR based on its “thin” platform.

As a result, Mr Zander said the Schaumburg, Illinois-based company’s share of the global handset market in the latest quarter increased to 19 per cent, up about 3.1 percentage points from a year earlier. The market share gains came despite component shortages which held back sales of some handsets.

“We further distanced ourselves from number three, four and five,” said the Motorola chief executive.

“We are now the clear number two and gaining.”

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