Motorola shifts focus to better phones

Article Excerpt

MOTOROLA INC. $18 (New York symbol MOT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 2.4 billion; Market cap: $43.2 billion; WSSF Rating: Above average) gets about 60% of its revenue from mobile phones. However, strong sales of entry-level models in China and other developing countries have hurt Motorola’s profits lately. In the three months ended March 31, 2007, Motorola lost $0.09 a share (total $218 million) from continuing operations. However, that figure includes $0.11 a share in unusual charges. The company earned $0.26 a share ($656 million) a year earlier. Revenue fell 2.1%, to $9.4 billion from $9.6 billion. Motorola now aims to spur long-term growth by focusing on higher-margin phones with advanced features. Consequently, it has agreed to pay $140 million for Terayon Communication Systems Inc., which makes chips that process video signals. This technology will improve the displays on Motorola’s phones, as well as make it easier for cellphone service providers to customize video programs and advertising for…