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Last Updated: Wednesday, 20 October, 2004, 05:19 GMT 06:19 UK
New phones boost for Motorola
Motorola V90 phone
Motorola shares have been healthy this year
Mobile handset maker Motorola has unveiled a fourfold increase in quarterly profits, crediting strong demand for its new-look phones.

Earnings for the three months to September were $479m (268m), up from $116m a year earlier, the firm said.

Motorola shares dropped during extended trading in New York despite sales jumping 26% to $8.62bn.

Analysts said they had expected better data and raised concerns that the firm had lost some market share to rivals.

Crowded marketplace

Competition in the industry has increased, especially after leader Nokia cut the cost of its handsets in the hope of winning new customers.

Motorola also has seen firms such as Samsung move closer, threatening its position as the world's second-biggest mobile phone maker.

HANDSET MARKET SHARE
Nokia 29.7%
Motorola 15.8%
Samsung 12.1%
Siemens 6.9%
Sony Ericsson 6.6%
LG 6%
Others 22.9%
Figures are for second quarter of 2004
Source: Gartner

"The company has outperformed expectations for a couple of quarters in a row," said Ed Snyder, an analyst at Charter Equity Research. Analysts were "looking for a repeat performance and they didn't get it."

"So while Motorola is doing phenomenally better than last year, expectations are for continued acceleration, not a status quo."

Across the board

Motorola's mobile phones division - its largest single business - accounted for the bulk of its profits, generating some $390m in operating earnings.

The increase reflected the successful launch of 17 new handset models with colour displays and built-in cameras.

Its semiconductor business notched up operating earnings of $82m, while sales rose 17% on the year to $1.4bn.

Chief executive Ed Zander said Motorola's prospects were "pretty solid and optimistic".

"We have the best product line-up we've had in a long time," he said, adding that Motorola would continue to increase its market shares in coming quarters.

The company forecast fourth-quarter sales of between $9.3bn and $9.6bn.

Motorola's share price dropped to $17.90 during electronic trading in New York, down from a close of $18.70.


SEE ALSO:
Sony Ericsson sees profits triple
14 Oct 04  |  Business
Motorola to lay off 1,000 staff
28 Sep 04  |  Business
Vodafone launches 10 new 3G sets
22 Sep 04  |  Business
Nokia sees rise in handset sales
09 Sep 04  |  Business
DoCoMo in Motorola 3G talks
23 Aug 04  |  Business
Mobile phone shipments soar
30 Jul 04  |  Business
Motorola dials up growth in sales
21 Jul 04  |  Business


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