Motorola Mobility continued on a downward trend after being acquired by Google as it reported a larger loss than originally thought amidst declining sales in the third quarter. The company is still in a turnaround mode as CEO, Dennis Woodside is trying to work his magic, but the results are yet to show. The company reported an operating loss of $527 million with the handset division making up for a majority of that loss. Around a year ago, the loss was a much more tolerable $41 million.
When the statistics are broken down, the fact that the company is trying to turn around becomes evident. Loss excluding single spending comes to $151 million and revenue reduced by 14% to $2.58 billion. It appears that even here the handset division is responsible for a large part of the loss. These results come from Google’s earnings report which was shown prematurely and demonstrated that the company had fallen short of revenue expectations. Analysts also blamed Motorola for causing Google’s stock to slip by 10% and stop trading for a while. Motorola is among the major handset companies that were once major players in the industry but are now struggling to make a profit. With the exception of Apple and Samsung all handset manufacturers are either reporting minimal profits or huge losses.
Motorola is, however, in a relatively better position, than HTC which has been dropping revenue continuously. Being part of Google, Motorola’s loss can be easily offset by Google’s huge earnings and revenues. The company still has time and flexibility and doesn’t have any shareholders to account to. However, results appear to be slow despite Google’s support and Motorola has a long way ahead of it. Google has been slimming down the organization ever since it took over by cutting jobs and getting rid of side projects and shifting focus to fewer devices. In fact, Google just announced that it took on 1807 employees for itself but reduced the employee count by 2865 at Motorola.
Motorola’s initial success with the smartphone market was linked to Verizon’s rapid rise. The carrier and the company had a joint line of devices i.e. the Droid lineup which proved pretty successful, early on. However, now, it appears that the company is going to need more than just one line of devices to get back in the game.
