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Last Updated: Wednesday, 21 April, 2004, 07:32 GMT 08:32 UK
Motorola profit and shares surge
Motorola phone
New designs and add-ons such as camera are boost sales
Motorola, the world's second-largest maker of mobile phones, has said profit tripled in the first quarter, driven by increasing demand for its handsets.

The report is much better than expected and will increase pressure on market leader Nokia, which has seen sales dip.

Motorola's first-quarter profit was $609m (342m), compared with $169m a year earlier. Sales were $8.6bn, while revenue from mobile phones jumped 67%.

The good news lifted its shares almost 25% in after-hours trading in New York.

Adding to the upbeat mood, Motorola also forecast earnings for this quarter that have topped analysts' targets.

Catching up

"It was pretty clear they were taking market share from Nokia," said Matt Hoffman, an analyst at Schwab Soundview Capital Markets.

During the first three months of this year, Motorola said it sold 25.3 million phones and increased its market share.

Chief executive and chairman Edward Zander seems to have fixed a supply problem that dented earnings in previous quarter.

"Sales and earnings exceeded our start-of-the-quarter guidance, the result of strengthening customer demand, improved execution in delivering new products and growing market share in some areas," Mr Zander explained.

The company is now predicting that second-quarter sales of between $8.2bn and $8.6bn. Analysts had forecast revenue of about $6.9bn.

Erosion

Nokia, by comparison, is predicting that things are going to get worse before they get better.

Last week it reported a 16% drop in first-quarter profits after previously warning that sales were weak.

More worryingly for investors, Nokia also forecast that earnings per share would be lower than expected later this year.

As well as Motorola, Nokia is facing stiff competition from rivals such as Sony-Ericsson, Samsung and Siemens.




SEE ALSO:
Nokia warns of tough times ahead
16 Apr 04  |  Business
Nokia dials a wrong number
16 Apr 04  |  Business
Sony Ericsson returns to profit
19 Apr 04  |  Business
Motorola takes chips off the menu
06 Oct 03  |  Business
Motorola squeezes out profit
15 Jul 03  |  Business


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