said it will likely fall short of expectations with its fourth-quarter report as handset sales were impacted continued weakness in consumer demand.
The struggling Schaumburg, Ill., tech giant offered preliminary results for its fourth quarter late Wednesday, saying it expects a net loss from continuing operations in the range of 7 cents to 8 cents a share, including estimate net charges of approximately 6 cents a share in items. On average, analysts expected a profit of 5 cents a share, according to Thomson Reuters.
Motorola also said total sales for the fourth quarter should fall in a range of $7 billion to $7.2 billion, falling short of Wall Street's target of $7.51 billion. The shortfall comes as Motorola said it shipped only approximately 19 million units during the quarter.
"The Motorola tailspin is truly epic," wrote Tero Kuittinen, senior director of research with Global Crown Capital. "They dove to 19 million units already in the fourth quarter, down from 25 million during the third quarter, this in the seasonally strong fourth quarter. This has to reflect how their core North American business is now collapsing under competition from new rivals."
The company said it will release its full fourth-quarter report Feb. 3. After falling nearly 5% during Wednesday's session, shares of Motorola were up nearly 1% in late trading to $4.15.
Additionally, the company said it will further reduce its workforce by approximately 4,000 positions. This reduction will include approximately 3,000 positions in the Mobile Devices business and approximately 1,000 positions associated with corporate functions and other business units.
Job cuts aren't anything new for Motorola, which has swung the ax multiple times as the company's handsets have fallen out of style. After its disappointing third-quarter earnings release in October, Motorola announced it would slash 3,000 jobs, with two-thirds of the cuts will come from the mobile devices segment. In December, Motorola said it would permanently freeze its U.S. pension plans and would temporarily suspend matching contributions to employee 401(k) plans as part of its bid to cut costs.
In total, the cost-reduction initiatives are expected to result in annual cost savings of approximately $1.5 billion in 2009, Motorola said.
"The actions we are taking today in our Mobile Devices business will allow us to further reduce our cost structure and positions us for improved financial performance in 2009," said Sanjay Jha, co-chief executive officer of Motorola, in a statement. "Together with these actions and the announcements made in the fourth quarter, the Mobile Devices business expects to recognize annual cost savings of approximately $1.2 billion in 2009."