Motorola’s $231M Q1 loss only scratches the surface

Only a once-behemoth company like Motorola can manage to lose billions of dollars a year and still retain a significant market share. Still, Motorola’s global cellphone market share is quickly eroding, and the company’s latest $231 million loss is the proof in the mobile-pudding. Motorola’s $231 million Q1 2009 short-fall made last year’s Q1 losses of $194 million look appealing, but still managed to beat Wall Street’s projected Q1 performance.

Motorola managed to sell some 14.7 million mobile phones in Q1, edging out Sony Ericsson’s 14.5 million units worth of handset sales. Q1 sales netted Motorola $5.4 billion in revenue, again down from the year-ago period, which saw revenue of $7.5 billion. But, these numbers are considering Motorola’s entire business. When we concentrate on the Motorola’s Mobile Devices division, things take a turn for the worse.

Sanjay Jha, co-CEO of Motorola and CEO of Mobile Devices, stated:

“In the quarter at Mobile Devices, we implemented aggressive actions to reduce costs and also gained solid traction on improving operational effectiveness. Customer feedback on our smartphone roadmap remains very positive, and we plan to have differentiated Android-based devices in stores in time for the fourth-quarter holiday season. We significantly reduced the operating loss in Mobile Devices compared with the fourth quarter of 2008 and have increased the 2009 annual cost-reduction target to more than $1.3 billion.”

Motorola’s cellphone division posted sales of $1.8 billion, down 45% compared to Q1 last year. Handset sales weren’t enough to keep up with costs, as Motorola saw its Mobile Devices division losing some $509 million in the first quarter of 2009. Compared to last year’s Q1 loss of $418 million, it’s clear that Motorola’s slide isn’t stopping anytime soon. Moto’s cellphone division is bleeding the entire company dry, and puts the future of Motorola in doubt. But, Android might be able to save Moto.

Motorola is rumored to be releasing some interesting Android-powered smartphones in Q4 of this year, which may spark a turn-around in the company’s finances. The Motorola Calgary may prove to be a mass-market Android handset with some serious street-cred and eye-catching industrial design. Unfortunately, we’ll have to wait to hear more from Motorola in the coming days.

If not for Motorola’s earnings from their other businesses, Motorola’s Mobile Devices division would have driven the company to even lower lows in Q1 2009. Motorola expects Q2 to continue the trend towards overall operating losses.

[Via: CellularNews]