Update: Despite challenges, Motorola still expects a profitable year

Motorola reported a loss of $56 million, or $0.19 per share, on net revenue of $3.3 billion for the second quarter, as the phone and tablet maker continues to struggle to make 4G products.

Revenue was up 28 percent over the second quarter in 2010. Analysts were expecting revenue of $3.1 billion. Excluding certain items, Motorola earned $0.9 per share, beating analyst expectations of $0.06 per share.

Motorola shipped 11 million mobile devices, including 4.4 million smartphones and 440,000 Xoom tablets, during the quarter. In the initial month it was available during the first quarter, Motorola sold 250,000 Xoom tablets.

The company still expects to be profitable in the fourth quarter and for the full year 2011, said Chairman and CEO Sanjay Jha in a statement about the earnings report. But it expects third-quarter earnings per share in the $0.00 to $0.10 range, while analysts were hoping for $0.24 per share.

After spinning off into a stand-alone company, Motorola's handset business got off to a good start but the company has struggled recently to migrate to 4G technologies. The Xoom tablet, for instance, was supposed to get a 4G upgrade in the second quarter, but the update has been pushed back until September, Jha confirmed during a conference call to discuss the results.

He also said the 4G Droid Bionic won't come out until September. Motorola announced the phone with Verizon in January and in April said the 4G phone was coming soon. Motorola has had problems with other devices too -- users are reporting that the recently released Triumph phone has technical problems.

Still, Motorola is banking on its LTE, or 4G, devices to drive growth going forward. "In the second half, we're focused on delivering our road map of different devices, particularly in LTE," Jha said. In addition to the Bionic, the company will launch another LTE phone and two additional LTE tablets, he said.

Motorola also continues to pursue the enterprise market. It expects to offer two tiers of devices that work with its laptop docking stations: a tier for consumers and another for enterprise customers, Jha said. Earlier this year Motorola unveiled the first device with its webtop software, the Atrix, which lets users put their phones in a docking station that has a larger screen and full keyboard. Jha didn't say what features the enterprise versions of those products will have.

Motorola also continues to develop products using enterprise security technology it acquired from 3LM. It's working to offer corporate video conferencing on phones that uses the 3LM technology, Jha said.

Copyright © 2011 IDG Communications, Inc.

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