Amazon price 699 for the Verizon Galaxy Nexus
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Why would they? They are making google money by producing android phones. Not to mention moto makes some of the best quality(build and call) out of the androids. If you really think they will shut them down well you don't know much about business then.
Really?
Motorola Mobility (NYSE: MMI - News) reported somber financial results for the third quarter of 2011. Following the earnings release, stock price of Motorola Mobility went down by 7 cents (0.18%) to $38.95.
Quarterly GAAP net loss was $32 million or 11 cents per share compared with $34 million or 12 cents per share in the prior-year quarter. Adjusted (excluding special items) EPS in the reported quarter was a loss of 12 cents, wider than the Zacks Consensus Estimate of a loss of 10 cents. Quarterly total revenue was $3,259 million, up 10.6% year over year but below the Zacks Consensus Estimate of $3,376 million.
Gross margin in the reported quarter was 25.9% compared with 26.8% in the prior-year quarter. Quarterly operating loss was $5 million compared with an operating income of $6 million in the year-ago quarter.
During the third quarter of 2011, Motorola Mobility’s cash flow from operations was $25 million compared with the cash generation of $324 million in the prior-year quarter. Free cash flow (cash flow from operations less capital expenditure) in the reported quarter was negative $15 million compared with $298 million in the year-ago quarter. Cash and cash equivalents at the end of the third quarter of 2011 was $3,078 million. The company had no debt on its balance sheet in the quarter.
Mobile Devices Segment
Quarterly revenue was $2,434 million, up by 19.7% year over year. Operating loss, on a GAAP basis, was $41 million compared with $43 million in the year-ago quarter.
During the third quarter of 2011, Motorola Mobility shipped 11.6 million mobile handsets including 4.8 million smartphones. This is a considerable improvement from 3.8 million smartphones shipped in the prior-year quarter. The company also shipped approximately 5.3 million feature phones in the year-ago quarter. Furthermore, Motorola Mobility shipped 100,000 XOOM tablets in the reported quarter.
Home Segment
Quarterly revenue was $825 million, down 9.5% year over year. GAAP operating income was $54 million versus $49 million in the year-ago quarter. Significant improvement in operating income was mainly attributable to higher demand of DVR set-top boxes.
Motorola Mobility and Google Agreement
On August 15, 2011, Motorola Mobility Holdings Inc. announced that it has entered into a definitive agreement with Google Inc. (NasdaqGS: GOOG - News), under which the latter will acquire 100% stake of Motorola Mobility for $40 per share in cash or a total consideration of approximately $12.5 billion.
Presently, Motorola Mobility holds rights for approximately 17,000 patents and another 7,500 patent applications are in process, which Google is mainly eyeing. Moreover, the company is one of the leaders in the set-top box category, which makes it another lucrative opportunity for Google as the latter is aggressively rolling out the next generation smart TV option called GoogleTV.
Our Take
Currently, Motorola Mobility boasts a huge 4G product line up, which we believe will act as a growth catalyst going forward. However, lack of product differentiations and stiff competition from other cheap smartphone makers will act as headwinds for the stock going forward.
We, thus, maintain our long-term Neutral recommendation for Motorola Mobility Holdings Inc. Currently, Motorola Mobility Holdings Inc. has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
It is estimated that most of that loss is due to expenses from the merger, plus when you look at motorola's earnings reports in the past you can see that they have been creeping up toward making a profit since the OG droid (before that they were in a death spiral and it has taken them a while to dig out of that hole).
Additionally google has already stated that they would keep the motorola brand and they would continue to operate as a semi-independent entity.
I think we all realize they were losing money. That doesn't mean google will dissolve their handset division, though.
Google is not in business to lose money.
http://www.nytimes.com/2011/11/10/t...to-trim-a-bloated-ship.html?_r=1&pagewanted=2
http://www.nytimes.com/2011/11/10/t...to-trim-a-bloated-ship.html?_r=1&pagewanted=2
There probably will be some restructuring at moto after the merger: kill blur, larger focus of fewer devices (maybe?) and eliminating redundant positions (mostly in moto's software division). But to actually kill moto's handset division would not be a good move, keeping moto around would be google's ace in the hole, no mater what the landscape for oem devices looks like 5 years from now, google will have moto devices running android. Google would also have a chance to lead by example when it comes to updating devices and they would have a mainstream outlet to show that android does not need to be skinned to sell well.
Motorola is still in the process of turning around, some smart management from google could easily turn moto's hardware into a profitable division for google.
Motorola is still in the process of turning around, some smart management from google could easily turn moto's hardware into a profitable division for google.
I could see Google axing Moto's handset division. If its not makiing money now, its probably not going to later either. Besides, didn't Google buy Moto for their patents?
Really? I had no idea.
Take your blinders off, man. They are going to restructure, not eliminate the entire handset division.
Restructure is a fancy word for fire everyone, and hire (or use) new people. Thats pretty much axing a division, LOL.
I'm aware. I've been through several. It doesn't mean they're going to stop manufacturing handsets, though.
Because the agreement with Samsung was finalized before the acquisition was even announced?
Because the development for a phone is about a YEAR not months. the acquisition was this year.
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