Motorola posts higher quarterly profit

NEW YORK - Motorola, the world's second biggest cellphone maker, today said its second-quarter earnings and revenue rose on a tax benefit and a legal settlement as well as strong demand for its cellphones, including its flagship Razr phone.

The Schaumburg, Illinois-based company posted earnings of US55 cents (NZ89.4 cents) a share compared with 37 cents a share in the year-ago quarter. Revenue rose 29 per cent to US$10.88 billion ($17.7 billion) from US$8.41 billion.

Motorola said earnings from continuing operations were 54 cents a share, including a 21 cent benefit from unusual items such as tax benefits and a litigation settlement.

Analysts, on average, had expected earnings of 29 cents a share on revenue of US$10.12 billion, according to Reuters Estimates.

The analysts' forecast was comparable to Motorola's reported earnings per share from continuing operations, excluding special gains, of 31 cents, according to Reuters Estimates.

Motorola forecast third-quarter revenue of between US$10.9 billion and US$11.1 billion.

Motorola said it sold 51.9 million handsets in the quarter and that its share of the cellphone market rose to 22 per cent from 21 per cent in the first quarter.

Motorola shares traded at US$19.28 in after-hours trade on Inet after closing up 37 cents at US$19.25 on the New York Stock Exchange.

Motorola's stock has fallen almost 20 per cent in the last three months on concerns about its reliance on the Razr for growth amid intensifying competition and slowing demand.

Motorola's shares trade at almost 14 times 2007 earnings estimated by analysts, compared with a multiple of more than 16 times for bigger rival Nokia, which has improved its phone lineup after it was criticised for lagging behind Motorola in design.

- REUTERS