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Motorola blamed slower GSM infrastructure sales in Europe and lower sales of iDEN phones for use on the Sprint Nextel network in the US for a decline in third-quarter profits and sales trailed the company’s forecast.
The company’s stock, buoyed over the past two years by the continuing success of its family of Razr phones, fell by almost 8 per cent to $22.90 in after-market trading after closing at $24.85 on the New York Stock Exchange.
The share price decline reflected disappointment over Motorola’s financial performance despite continuing strong handset sales.
Third-quarter profit fell to $968m, or 39 cents a share, from $1.75bn, or 69 cents a share, in the year-ago quarter, when it reported 39 cents per share of unusual gains including a gain from its investment in Nextel Communications.
Revenues grew by 17 per cent to $10.6bn, boosted by record handset shipments of 53.7m compared with 51.9m in the second quarter and 38.7m in the third quarter of last year.
Motorola, which ranks second behind Finland’s Nokia in terms of mobile phone shipments, estimated that its share of the global handset market increased by 3.8 per cent to 22.4 per cent in the latest quarter.
“During the quarter, GSM infrastructure sales in the Europe, Middle East and Africa region were weaker than anticipated due to customer delays in capital spending,” said Ed Zander, Motorola’s chief executive.
The company is battling Nokia in the expanding markets of China and India.