Motorola Mobility Sees Home Unit's Sales Dipping In Q3
Motorola Mobility expects sales in the cable-centric Home unit to decline in the current quarter -- after a modest 2% uptick in the second quarter 2011 -- and said the unit's revenue for the full-year 2011 will be flat with last year.
For the quarter ended July 3, Home segment revenue was $907 million up from $886 million in the year-ago period and operating earnings were $62 million, compared with $29 million in the year-ago quarter.
Set-top shipments in the second quarter were up more than 10% versus the year-ago quarter. The company said the higher set-top revenue was offset by slightly lower infrastructure sales.
The company touted key wins in the period with Time Warner Cable to develop an advanced video gateway platform based on the DCX3600M and the launch of Televation, a Slingbox-like device developed in partnership with Comcast to let consumers watch live TV on a connected IP device inside the home.
However, in the third quarter, Motorola Mobility expects the Home segment's sales and operating margin to decline.
The company said Home's full-year 2011 will be comparable to last
year but that operating margin would improve. For the full year 2010,
Home net revenue was $3.6 billion and operating earnings were $152
million (an operating margin of 4.2%).
"In Q3, we have a seasonality factor, which in many of the past years has driven that quarter to be slightly lower on a revenue basis," Motorola Mobility president Dan Moloney said on the company's earnings call Thursday. "That said, again if you look at the Home business on a full-year basis, we are guiding to relatively flat year-over-year revenue and an operating income performance increase of as large as 100 basis points."
The Home unit sells set-tops, gateways, DVRs, cable modems, video-processing gear and other service-provider equipment.
Overall, Motorola Mobility reported second-quarter revenue of $3.3 billion, up 28% year over year, on surging sales in the Mobile Devices division. The company posted a net loss of $56 million ($0.19 per share), compared with net income of $80 million ($0.27 per share) in the year-ago quarter.
Mobile Devices revenue in the second quarter was $2.4 billion, up 41% from the year-ago quarter, with an operating loss of $85 million versus operating earnings of $87 million in the year-ago quarter. The company shipped a total of 11.0 million mobile devices, including 4.4 million smartphones and 440,000 Xoom tablets.
The company's expects third-quarter earnings of $0.00 to $0.10 per share and full-year 2011 net earnings per share of $0.48 to $0.60.
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