When your company earnings nose dive 84% in the fourth quarter and you issue a warning that the recovery will take longer than expected, It is not all that surprising that the reaction on Wall Street will be swift and brutal.
To put that into perspective, Motorola's net income amounted to 4 US cents per share, which was down from $US623 million, or 25 US cents per share a year earlier. Sales also fell from $US11.79 billion to $US9.65 billion. If that wasn't enough, Motorola's global market share is down 13 per cent from 23 per cent at the end of 2006—and it hasn't bottomed out yet.
As mentioned back in October, the most serious losses have come from their handset division. Sales have sunk 38 per cent to $US4.8 billion during the quarter, with a total operating loss of $US388 million. The total damage tops out at $US4.9 million compared to a $US3.67 billion profit in 2006. Not to worry though, Motrorola execs said that innovative new devices would help turn things around. Duh! During morning trading Motorola shares plunged $US1.96, or 15.9 per cent, to a nearly four-year low of $US10.36. [Brietbart via Valleywag]