Motorola Mobility Inc posted higher than expected quarterly revenue driven by improving smartphone sales, and said it may turn a profit in the second quarter, sending its shares up 3 percent.
Continue Reading Below
The maker of the Droid line of smartphones said it shipped 4.1 million smarpthones in the quarter, slightly ahead of the average analyst estimate of 3.7 million, according to six analysts contacted by Reuters.
Expect that to improve in the current quarter. "We will have a sequential smartphone increase quarter-over-quarter and a sequential increase in revenue from Motorola Mobility overall and mobile devices," Chief Executive Sanjay Jha told Reuters.
The company said it expects to at least break even in the second quarter but could post a profit of up to 12 cents per share, excluding items.
Wall Street analysts said they were relieved by the results and the second-quarter target as many were concerned that Motorola would report weak results for both.
"They beat on every metric. It's a relief," said MKM Partners analyst Tero Kuittinen. "It looked like the Android market in North America was better than expected."
Continue Reading Below
Motorola smartphones all run Google Inc Android software. Chief Executive Sanjay Jha had warned that first quarter financials and phone sales would be hurt by new competition in the form of a new Apple Inc iPhone at Motorola's most important U.S. customer Verizon Wireless.
Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc, had championed Motorola's smartphones in its efforts to compete with AT&T Inc, previously the exclusive U.S iPhone provider.
Motorola had also worried some investors when it said it was delaying its next big phone for Verizon Wireless. [nN19100766]
"There was a lot of caution around the second quarter," Avian Securities analyst Matthew Thornton said.
In its first quarter as an independent company, Motorola Mobility narrowed its quarterly loss to $81 million or 27 cents per share from a loss of $212 million or 72 cents per share in the same quarter the year before.
Excluding unusual items Motorola's loss would have been 8 cents per share, better than the average analyst expectation for 12 cents a share, according to Thomson Reuters I/B/E/S.
Revenue rose to $3.03 billion from $2.48 billion in the year-ago quarter and compared with the average analyst expectation for $2.826 billion.
Motorola shares rose 3 percent to $24.70 in late trade after closing at $23.99 on the New York Stock Exchange.