Motorola 4Q Profit Plunges 84%

Motorola Inc.’s new CEO, Greg Brown, warned on Wednesday that a turnaround in the company’s handset division will take longer than expected, after the equipment maker reported an 84 percent plunge in fourth quarter profits.

Motorola shipped fewer wireless phones in the final quarter of 2007 and kept losing handset market share.

It posted net income of $100 million, or 4 cents per share, as compared to $623 million, or 25 cents per share, in the fourth quarter of 2006. Sales also dropped 18.2 percent, from $11.79 billion to $9.65 billion.

Motorola’s stocks took a similar dive on the news. Shares plummeted 14.7 percent during the second hour of trading on Wednesday, changing hands at $10.53.

“Our primary focus is on improving profitability and enhancing our product portfolio in this business,” Brown said in a statement, referring to the handset unit. “At the same time, we are very pleased with the continued strong performance of our home and networks mobility and enterprise mobility solutions businesses."

Motorola has had a tough year. It now sits in third place behind Nokia and Samsung. Ed Zander resigned as CEO in November, although he remains as chairman of the board until May. The company’s CTO, Padmasree Warrior, also defected to Cisco Systems Inc. not long after Zander stepped down. Finally, Motorola laid off about 6,600 employees in 2007 as it tried to cut costs.

Motorola Inc. www.motorola.com