Motorola Changes Up Leadership, Revises First Quarter Earnings Projections

Poor performance in the Mobile Businesses unit prompted Motorola Inc. on Wednesday to shake up its leadership and announced projected weaker-than-expected revenue for the first quarter of 2007.

“Performance in our Mobile Devices business continues to be unacceptable, and we are committed to restoring its profitability,” said Edward J. Zander, chairman and CEO of Motorola. “After a further review following the leadership change in our Mobile Devices business, we now recognize that returning the business to acceptable performance will take more time and greater effort.”

To that end, Motorola said CFO David Devonshire was retiring, to be replaced by Thomas Meredith on April 1. Greg Brown, who previously led Motorola’s Networks and Enterprise business, takes over as president and COO immediately.

Motorola now says it will report first-quarter sales of between $9.2 billion and $9.3 billion. That’s down from a January forecast $10.4 billion to $10.6 billion. According to a Thomson Financial survey, analysts were expecting first-quarter revenue of $10.46 billion.

Motorola blamed the revisions mainly on its Mobile Devices unit, which brought in far less money than anticipated. There also were acquisition-related charges, in-process R&D expenses associated with the acquisitions of Symbol Technologies, Good Technology and Netopia, and costs from the layoffs of 3,500 people, the company said.

The problems in the Mobile Devices unit stemmed from several factors, Motorola noted. Those were lower sales volumes, “a difficult pricing environment” and a limited 3G product portfolio.

Motorola’s first quarter 2007 results are scheduled to be announced on April 18.

Motorola Inc. www.motorola.com

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