Motorola on Tuesday reported a stunning net loss on tumbling revenue for the fourth quarter.
The net loss for the phone maker in the quarter, which ended December 31, was US$3.6 billion, or US$1.57 per share, compared with positive earnings of US$100 million (4 cents per share) for the same period a year earlier.
All but one penny of the per-share loss stemmed from net charges related to the impairment of goodwill and an increase in deferred tax asset valuation reserves.
The loss had been widely expected after Motorola in January announced plans for layoffs and said revenue would come in below analysts' expectations, on weaker-than-expected handset sales.
Revenue for the fourth quarter was US$7.1 billion, down 26 percent from US$9.6 billion year over year.
The news sent Motorola's shares tumbling in early trading Tuesday, down approximately 10 percent to just over US$4 a share, from Monday's closing price of US$4.54.
Motorola stressed Tuesday that it is doing everything it can to keep costs under control amid a faltering economy. Co-CEOs Greg Brown and Sanjay Jha said in a statement:
In light of the economic climate and challenges we face, we have implemented aggressive measures to reduce costs and improve financial flexibility, particularly in Mobile Devices. The cost-reduction actions underway are expected to generate aggregate savings of approximately US$1.5 billion in 2009.
In January, Motorola said it would lay off about 4,000 workers, on top of the 3,000 job cuts announced in October in a broad restructuring.
Trouble on the cell phone front was a significant factor in the fourth-quarter loss. Sales in the company's Mobile Devices segment were US$2.35 billion, down 51 percent from the fourth quarter of 2007. Motorola said that during the quarter just ended, it shipped 19.2 million handsets and estimated that its share of the global handset market was 6.5 percent. That compares with 25.4 million handsets in the third quarter and 40.9 million in the fourth quarter of 2007.
Motorola said it is on target to launch next-generation devices during the fourth quarter of 2009. In October, the company simplified its development efforts, ditching Symbian and other mobile operating systems, to focus on Windows Mobile and Google's Android.
Also in the fourth quarter of 2008, Motorola said Tuesday, sales in the Home and Networks Mobility segment were US$2.6 billion, down 5 percent compared with the year-ago quarter. Enterprise Mobility Solutions segment sales were US$2.2 billion, up 4 percent compared with the year-ago quarter.
For the full year, Motorola reported a net loss of US$4.1 billion on revenue of US$30 billion.
The outlook for the first quarter of 2009 won't likely offer any reassurances to investors. Motorola foresees a loss of 10 cents to 12 cents per share, excluding charges.
The company also said it is suspending its cash dividend, effective immediately.
This article was first published as a blog post on CNET News.
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