New York: Motorola Inc. on Thursday posted its first year-over-year quarterly sales rise since 2006, when its Razr phone was still cutting-edge technology.
The company’s phone division reported an operating profit even though it hadn’t expected that to happen until next quarter. The division is pulling out of a deep multiyear dive by betting on smart phones like the Droid X.
Revenue rose 6% to $5.8 billion in the July to September period.
The Schaumburg, Illinois, company reported net income of $109 million, or 5 cents per share. That’s up from $12 million, or 1 cent per share, a year ago. Excluding items, Motorola would have earned 16 cents per share. Analysts expected 11 cents per share.
However, nearly all the profits came from the soon-to-be sold network equipment division, which supplies cell phone companies. Without it, the company would only have broken even.
Motorola shares rose 23 cents, or 2.8%, to $8.32 in pre-market trading.
In July, Motorola agreed to sell the network equipment division for $1.2 billion to Nokia Siemens Networks, a Finnish-German joint venture. That deal is expected to close late this year.
Early next year, the iconic US electronics brand will split into two companies. The cell phone and cable box business will be called Motorola Mobility. Police radios, bar-code scanners and other products for corporate and government customers will be under Motorola Solutions.
The split has been driven by a desire to present two simple stories to investors rather than one complex one. It break was announced in 2008, but it has been delayed with phone sales collapsing. The successful turnaround now sets the division up for a life of its own.
The phone division shipped 9.1 million units in the most recent quarter, of which 3.8 million were smart phones. Both figures were an increase from the second quarter, halting a multiyear sales slide.
However, Motorola finds itself in a very different place compared to when the slide started. In 2006, it was the second-largest phone maker in the world. Now, it’s not even in the top five. It’s the third-largest phone maker in North America, after Apple Inc. and Research In Motion Ltd., the maker of the BlackBerry.