Motorola has singled out shortfalls in its mobile phone business as contributing to lower than previously expected fourth-quarter fiscal 2006 financial results.
In a profit warning issued late Thursday, the company blamed "an unfavorable geographical and product-tier mix of sales" in its mobile devices operation.
"We are very disappointed with our fourth-quarter financial performance," Ed Zander, Motorola chairman and chief executive officer, said in a statement.
Motorola's executives will lay out plans to improve profitability on Jan. 19 when the company is due to announce its final fourth-quarter results, he added.
Motorola is the second largest mobile phone maker behind
Nokia.
All mobile phone vendors are trying to find ways to deal with the falling prices of handsets. At the same time, Motorola has also yet to see sales of its latest slim-line phone, the Krzr, which debuted in July, take off to the extent of its successful Razr handset.
As the developed world reaches saturation point with mobile phones, Motorola's hoping to sell a large number of its new Motofone handsets introduced in November to first-time phone users in developing nations.
In October, Motorola estimated its fourth-quarter sales in the $11.8 billion to $12.1 billion range. The company has now scaled back that prediction to a preliminary sales estimate of between $11.6 billion and $11.8 billion and earnings per share (EPS) of between $0.13 and $0.16. The EPS is substantially below the $0.39 predicted in a recent consensus estimate of Thomson Financial analysts.
In early Friday trading, Motorola's share price was down 8.13 percent to trade at $18.88.
The news was better in other parts of Motorola's business. The company's networks and enterprise unit and its connected home operation are on track to match or exceed the vendor's internal expectations, which it set at the beginning of the fourth quarter, Motorola said.
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