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Motorola Puts Its Faith in Androids

Stocks in this article: MOTGOOG

SCHAUMBURG, Ill. ( TheStreet) -- Motorola's (MOT) cost cutting continues as the shrinking phonemaker looks ahead to a brighter Google (GOOG) Android future.

The Schaumburg, Ill.-based tech shop says it plans to introduce two Android-powered smartphones at two phone companies in the fourth quarter. One of those phones, as TheStreet reported, will be sold by Verizon (VZ) in time for the holiday sales season.

More than a little is riding on the Android smartphone strategy. Motorola's slice of the market, a return to profitability and, some would argue, the survival of the mobile phone business hangs in the balance.

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"The devices we are planning will get us back in the game in smartphones," Co-CEO Sanjay Jha told analysts on an earnings call. The success of these phone, says Jha, will "keep us on the path to financial improvements in 2009 and 2010."

For the second quarter ended last month, Motorola posted an adjusted net loss of a penny a share, down from the 2-cent pro forma profit in the year-ago quarter and better than the 4-cent loss analysts were looking for in a Yahoo! Finance survey.

Second quarter sales were $5.5 billion down 32% from the $8.08 billion booked a year ago, and slightly below the $5.6 billion Wall Street expected.

Looking ahead, Motorola says it expects to be at a breakeven point on profits in the third quarter as the company is still in a cutting process.

Jha told analysts on the call that the company has eliminated 30% of its staff since he started last year and that he expects the penny pinching trend to continue. Jha raised his target on cuts Thursday aiming at a $1.4 billion operating expense reduction compared to the $1.3 billion prior target.

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