Earnings Cheat Sheet: Motorola Shares Leap on Revenue Rebound, Droid Potential

Motorola (MOT) has been an out-of-favor cell phone company since the heyday of the Razr in 2006. That year, Motorola was the second largest cell phone company in the world. Changes have come fast in the world of technology and so has the position of the companies within the cell phone industry. Fast forward 4 years later with its entrance into the Google (GOOG) Android market, Motorola is now a big revenue catalyst on its hands once again to help catapult it from seventh place in the market. Here’s this quarter’s earnings breakdown:

Earnings: Increased to $.05 per share, or $109 million, this quarter. Last year in the same quarter, Motorola only earned $12 million, or $.01 per share.

Revenue: Climbed 6% to $5.8 billion over last year’s $5.4 billion in the same quarter.

Actual versus Wall Street Expectations: Excluding item charges, Motorola would have delivered $.16 per share, better than analyst expectations of $.11 per share. Analysts were also expecting $5.65 billion in revenue. Motorola clearly surpassed revenue expectations.

Notable Stats:

Mobile Devices sales were $2.0 billion, up 20% over the same quarter a year ago.

The company increased its cash position to $9 billion.

Smart-phone shipments were 3.8 million units, higher than analysts’ expectations for 3.7 million.

Motorola issued a positive outlook for the fourth quarter, expecting earnings from continuing operations of $0.14 to $0.16 per share.

Did You Hear That? Sanjay Jha, Motorola co-chief executive officer and Motorola Mobility CEO, stated, “We have added 12 devices to our smartphone portfolio, all of which will be in stores for the holiday season. This brings the number of smartphones we have introduced this year to 22. In North America, DROID X continues to sell extremely well. DROID 2, which features an improved keyboard and faster processor compared to the original DROID also sold well in the quarter.”

Commentary: On a technical basis, the sharp pop in MOT shares caused the price to clear the 50-day moving average. Since late August, shares of MOT have been above the 200-day moving average. The MOT stock price is now slightly better off than it was at the start of the year. Following this quarter’s report, wall street analysts expressed they are more impressed with the turnaround stage of Motorola. The company is placing a huge bet on an early entrance to the Android market and so far it is paying off. Additionally, Motorola’s Networks business is expected to be acquired by Nokia Siemens Networks in the fourth quarter. The deal will allow Motorola to focus and streamline its company operations toward core growth initiatives, potentially allowing for more investment into the fast growth smartphone space down the road.

Disclosure: No position held in MOT.