Muddy Trails for Motorola

Rapid recovery probably isn't at hand, but Motorola (MOT Quote) fans are optimistic that most of the dreadful downside drama is over.

The No. 2 mobile phone giant is due to report first-quarter earnings before the market opens Wednesday, giving investors another installment of the great Motorola collapse story.

Last month the Schaumburg, Ill., wireless tech shop slashed $1 billion off its first-quarter sales estimates, dismissed its CFO and poured $3 billion more into a stock repurchase program. The stunning turn of events capped the company's fourth consecutive quarterly disappointment.

Analysts have warned investors to brace for a little more negative news out of the company's all-important handset unit for the most recent quarter. A full report may show negative margins as the company tried to mop up a big surplus of phones to bring inventory back to normal, say the Wall Street researchers.

But don't expect the glut problem to disappear completely.

In a recent research report, Charter Equity Research analyst Ed Snyder says the company's outlook will still be gloomy. "Our most recent checks suggest that Motorola will fall short of even preannounced expectations and provide exceptionally weak guidance for the June period," Snyder writes.

Analysts are looking for adjusted earnings of 2 cents a share on $9.3 billion in sales for the first quarter ended last month, according to Reuters Research.