The shares of Motorola went down in trading in New York after the yearly and quarterly profits forecasts by the electronics company trailed the projections of analysts. The maker of the Droid line of smartphones released a statement yesterday saying that the profits this year will range from 48 cents to 60 cents per share, below the 66 cents estimated by analysts. According to Motorola, it expects to break even by the end of this quarter and may even report profits of up to 10 cents a share, while analysts had hoped for 24 cents.
Sanjay Jha, the Motorola CEO, has his hands full as he tries to return the company to profitability in face of heavy competition from the likes of Apple, Samsung and other Android manufacturers. He said during an interview that the delay in the release of the company’s Bionic smartphone, which was pushed back to September, and the decision of slashing the price of its Xoom tablet for attracting customers play a major role in the reduced earnings this quarter.
Analysts, however, say that the concern for long term is still the ever increasing competition in the smartphone market from the bigger manufacturers of Android phones. Motorola, whose stock prices have reduced by 22% this year, declined by 2.3% to reach $22.38 per share in yesterday’s trading. Even as the steady flow of new phones from the company has done much to bring back its handset sales after the business went through a reorganization period under Jha, its phone sales are still under a third of what they were 4 years ago.
The smartphone manufacturer stated that it has sold around 4.5 million handsets and a total of 11 million devices in the last quarter. It expects that more smartphones will be shipped in this quarter than the last and aims at shipping more than 22 million tablets and smartphones through the year.
Motorola’s Bionic, which will support the faster 4G connections, will be released this September in a delay which occurred after it had been tinkered for additional features. However Motorola plans to release another 4G model called the Photon in contract with Sprint in a couple of days. The company has reduced its expectations with tablets this quarter, saying that sales will be lower than the last quarter, as it sets itself up for releasing at least two new devices in the upcoming quarter.
