Motorola Posts Huge Q4 Loss & Stops Dividend

Motorola, Inc. today reported sales of $7.1 billion in the fourth quarter of 2008. The GAAP net loss in the fourth quarter of 2008 was $3.6 billion, or $1.57 per share. This includes net charges of $1.56 per share from highlighted items, which are outlined in the table at the end of this press release. Substantially all of the charges for the highlighted items are non-cash and primarily relate to the impairment of goodwill and an increase in deferred tax asset valuation reserves.

Motorola was betting on the Google's Android bases cellphone software to hopefully turn a profit but thus far has failed for them. Motorola shares dropped 9% to 4.16 in morning trading. "I'm bullish on the stock, not at all on the handsets," said Goldman analyst Simona Jankowski. "I feel their position in handsets is awful and will get worse."

For the full year 2008, sales were $30.1 billion. The GAAP net loss was $1.84 per share, which includes net charges of $1.86 per share from items highlighted in the Companys quarterly earnings releases.

During the quarter, the Company generated positive operating cash flow of $201 million. For the full year, the Company generated positive operating cash flow of $242 million and ended the year with a total cash* position of $7.4 billion.

The Company also announced today that its Board of Directors voted to suspend the declaration of quarterly cash dividends on the Company's common stock, effective immediately. The Board believes suspending the dividend will further strengthen the Companys balance sheet and enhance its financial flexibility.

Greg Brown, Motorolas president & co-chief executive officer and CEO of Broadband Mobility Solutions, and Sanjay Jha, co-chief executive officer and CEO of Mobile Devices, said, In the fourth quarter, we generated positive operating cash flow of $201 million and ended the year with total cash of $7.4 billion.

In light of the economic climate and challenges we face, we have implemented aggressive measures to reduce costs and improve financial flexibility, particularly in Mobile Devices. The cost-reduction actions underway are expected to generate aggregate savings of approximately $1.5 billion in 2009, added Brown and Jha.

Motorola started in Chicago, Illinois as Galvin Manufacturing Corporation in 1928 with its first product being a battery eliminator. The name Motorola was adopted in 1930, and the word has been used as a trademark since the 1930s. Founders Paul Galvin and Joseph Galvin came up with the name Motorola when the company started manufacturing car radios in 1930; the name is a combination of "motor" and "Victrola."

Many of Motorola's products have been radio-related, starting with a battery eliminator for radios, through the first walkie-talkie in the world in 1940, defense electronics, cellular infrastructure equipment, and mobile phone manufacturing. In the same year, the company built its research and development program with Daniel Noble, a pioneer in FM radio and semiconductor technologies joined the company as director of research.