Don’t be fooled by Motorola’s $26 million second-quarter profit. It’s not that systemic problems in its handset division have been solved, or that sales in its home networks division have improved. Instead, the company found itself in the black thanks to a bevy of one-time items, including a legal settlement and investment gains.
The company’s beleaguered handset division continued to suffer, with sales plummeting 45 percent to $1.83 billion from $3.33 billion last year. The company shipped just 14.8 million units, compared to 28.1 million last year, and its market share fell to 5.5 percent in the second quarter. Although cost-cutting measures seemed to help the segment’s profitability, Motorola handsets still managed to lose $253 million.
The company is banking on the release of several Android-based phones to get its handset segment on track in the holiday season, and says it is “pleased with the customer feedback” on its 2010 line-up.
Motorola has wanted to ditch its handset division for some time, but has had to put off divesting the segment.