UPDATE 3-Motorola posts loss, investors concerned about cash

* Q1 loss ex-items $0.08/share vs Wall St view $0.11 loss

* Q1 revenue $5.37 bln vs Wall Street view $5.5 bln

* Cash fell $1.3 bln in Q1, sees cellphone loss narrowing

* Shares fall 9 pct to $5.42 on NYSE (Adds analyst and executive quotes, share price update)

By Sinead Carew

NEW YORK, April 30 (Reuters) - Cellphone maker Motorola Inc (MOT.N) posted a smaller-than-expected quarterly loss thanks to cost cuts that helped offset a sharp drop in cellphone sales.

While it said losses would narrow in the current quarter, the cellphone maker's shares fell 9 percent after it also announced its cash position fell about $1 billion in the last three months.

"You don't want to see a company burning cash in such a tough credit market," said Charter Equity Research analyst Ed Snyder.

Motorola does not expect to have positive free cash flow again until the second half of the year.

Motorola shares were down 54 cents at $5.42 in midday trading on New York Stock Exchange. The stock had risen more than 90 percent by the close on Wednesday since early March when it traded at $3.10.

Motorola, which has struggled in recent years to stem sharp market share declines, posted a first quarter loss of $231 million, or 10 cents per share, compared with a loss of $194 million, or 9 cents per share in the same quarter a year ago.

Excluding some charges, its loss per share was 8 cents, better than the average analyst forecast for a loss of 11 cents, according to Reuters Estimates.

But revenue fell 28 percent to $5.37 billion, below the average Wall Street estimate of $5.55 billion.

"Amidst a very difficult economic environment, our results reflect disciplined execution and solid traction on our cost reduction efforts," Co-Chief Executive Greg Brown told analysts on a conference call.

PROMISES IMPROVEMENTS

Motorola expanded existing cost-cutting plans to help show improvements to its bottom line for the remainder of the year.