Motorola Mobility revenue misses, net loss narrows

NEW YORK Thu Oct 27, 2011 5:54pm EDT

NEW YORK (Reuters) - Motorola Mobility Holdings Inc's (MMI.N) third-quarter revenue rose at a slower pace than Wall Street estimates as it shipped fewer smartphones than expected.

Motorola, which has agreed to be bought by Google Inc (GOOG.O), said it sold 4.8 million smartphones in the quarter, compared with the average forecast of 4.96 million by five analysts contacted by Reuters.

Morgan Keegan analyst Tavis McCourt said Motorola's slight shortfall on revenue and phone shipment volumes was likely due to a pullback on marketing.

"They're getting acquired so they spent less on advertising and (therefore) sold slightly less phones," said McCourt.

Motorola's selling, general and administrative expenses fell to $426 million from $456 million in the year-ago quarter.

But since Google has already agreed to pay $12.5 billion, or $40 per share, to buy Motorola Mobility, investors focused on the deal rather than financial performance, analysts said.

Chief Executive Sanjay Jha said in a statement that the company still hopes to complete the Google deal in late 2011 or early 2012. Both companies have received requests for additional information from U.S. antitrust regulators reviewing the deal, which was announced on August 15.

U.S. SALES PERCENTAGE UP

While Jha said international sales were strong, North America, where it trails rivals like Apple Inc (AAPL.O) with the iPhone, accounted for a growing share of its business. About 48 percent of its third-quarter mobile device revenue came from the region, up from 43 percent in the second quarter.

Its next biggest markets were Latin America and China. Motorola uses Google's Android software in its smartphones.

Motorola Mobility reported a net loss of $32 million, or 11 cents per basic share, compared with a loss of $34 million, or 12 cents per basic share, in the year-ago quarter before Motorola Mobility became an independent company.

Excluding certain items, it earned 12 cents per share, double Wall Street expectations of 6 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose to $3.26 billion from $2.95 billion, compared with Wall Street expectations for $3.37 billion.

Including less advanced phones and tablets, the company said total mobile device shipments were 11.6 million. It shipped about 100,000 Xoom tablets, the company said.

Motorola shares were largely unchanged in late trade from their $39.02 close on New York Stock Exchange.

(Reporting by Sinead Carew; Editing by Andre Grenon and Richard Chang)

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