Shares of Motorola (MOT) plummeted as news emerged that the company not only lost $3.6 billion in the fourth quarter, but is suspending its dividend and saying goodbye to its chief financial officer.
The telecommunications giant posted a loss of $3.6 billion, or $1.57 a share, compared with a profit of $100 million, or 4 cents a share, in the same period a year ago. The company attributed most of its losses to goodwill impairment charges and an increase in deferred tax valuation reserves. Excluding those charges, the company lost one cent a share -- a penny less than analysts polled by Thomson Reuters were predicting.
Sales for the period fell 26% to $7.1 billion from $9.65 billion a year ago.
Motorola ended the year down $4.16 billion, or $1.84 per share, compared with a loss of $49 million, or 5 cents per share, in 2007. Revenue for the year came in at $30.1 billion -- an 18% decline from the year prior.
The Schaumburg, Ill.-based company, which announced 3,000 job cuts in October and another 4,000 in January, aims to cut costs by $1.5 billion this year as it adjusts amid the economic downturn.
“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,” said Greg Brown, the company’s president and co-chief executive officer and CEO of Broadband Mobility Solutions, and Sanjay Jha, co-chief executive officer and CEO of Mobile Devices, in a release.
Motorola sold only 19.2 million cell phones totaling $2.35 billion in the fourth quarter -- a far cry from the 40.9 million it sold the year prior. The company estimates it now represents 6.5% of the global handset market.
Even considering its cost-cutting efforts, the company is expecting a loss of 10 to 12 cents a share for the first quarter of 2009. Analysts were expecting a loss of only six cents a share.
In addition, the company’s Board of Directors announced the suspension of its quarterly cash dividend, hoping the move will “further strengthen the company’s balance sheet and enhance its financial flexibility.”
Motorola’s final announcement involved the departure of Chief Financial Officer Paul Liska, who was appointed last February. The company offered no details about Liska’s departure, but said Edward J. Fitzpatrick, senior vice president and corporate controller, will assume his responsibilities until a permanent replacement is found.
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