Motorola Announces Further 2009 Cost Reduction Actions and Provides Preliminary Fourth-Quarter 2008 Results
Announces approximately 4,000 additional workforce reductions, primarily in the Mobile Devices business
Total cost savings from recent actions now expected to be approximately $1.5 billion in 2009
Company to announce fourth-quarter financial results on February 3, 2009
SCHAUMBURG, Ill. – Motorola, Inc. (NYSE: MOT) announced further cost reduction actions, primarily associated with the Company’s Mobile Devices business. The Company also announced preliminary results for the fourth quarter of 2008. The Company will announce fourth-quarter financial results on February 3, 2009.
Motorola will further reduce its workforce in 2009 by approximately 4,000 positions. This reduction will include approximately 3,000 positions associated with the Mobile Devices business and approximately 1,000 positions associated with corporate functions and other business units. The workforce reductions announced today are expected to begin immediately and are incremental to the 3,000 workforce reduction actions previously announced during the fourth quarter of 2008.
Today’s workforce reductions, plus other incremental cost-reduction initiatives, including those announced on December 17, 2008, are expected to result in additional annual cost savings of approximately $700 million in 2009. The savings from these actions, together with the $800 million of savings from other actions announced during the fourth quarter of 2008 are expected to result in aggregate cost savings of $1.5 billion for the Company in 2009.
“The actions we are taking today in our Mobile Devices business will allow us to further reduce our cost structure and positions us for improved financial performance in 2009,” said Sanjay Jha, co-chief executive officer of Motorola. “Together with these actions and the announcements made in the fourth quarter, the Mobile Devices business expects to recognize annual cost savings of approximately $1.2 billion in 2009.”
“Additionally, we are making good progress in developing important new smartphones for 2009 and are pleased with the positive response from our customers to these new devices” added Jha.
Fourth-Quarter 2008 Preliminary Results
During the quarter, Mobile Devices shipped approximately 19 million units. Sales were adversely impacted by continued weakness in end consumer demand and customer inventory reductions. The Company’s Enterprise Mobility Solutions and Home and Networks Mobility businesses continued to perform very well in a challenging environment.
“Our Broadband Mobility Solutions businesses remain strong, are substantial franchises and are continuing to perform very well,” said Greg Brown, president & co-chief executive officer of Motorola.
“The Company ended the year with a total cash* position of approximately $7.4 billion,” added Brown and Jha. “Today’s actions will allow us to further reduce costs, improve operating cash flow and help ensure that Motorola remains competitive and financially strong during these challenging times.”
Total Motorola sales for the fourth quarter of 2008 are expected to be in the range of $7.0 billion to $7.2 billion. On a GAAP basis, the Company expects a net loss from continuing operations in the range of .07 to .08 per share, including estimated net charges of approximately .06 per share relating to items typically highlighted in the Company's earnings press releases. These items include reorganization of business charges, impairments of Motorola’s investment in Clearwire and in investments in the Company’s Motorola Ventures portfolio, a previously disclosed impairment in the Company’s Sigma Fund, offset partially by a gain from the decision to freeze the U.S. pension plan, and income from the collection of a legal settlement and the extinguishment of a liability. The Company is continuing the process to close its books for the fourth quarter and has not completed the impairment testing of long-lived assets, including goodwill, or finalized income taxes. When completed, these items could result in a larger GAAP net loss for the quarter.
In addition, the preliminary results do not include any charges related to the cost-reduction actions announced today. Charges related to these additional actions will be recorded in 2009 in accordance with accounting rules. As the Company finalizes its plans related to these actions, it will disclose in a Form 8-K filed with the SEC the amount and timing of the associated charges.
Motorola’s fourth-quarter results are scheduled to be announced at approximately 7:00 a.m. Eastern Time (USA) on Tuesday, February 3. The Company will host its quarterly conference call at 8:00 a.m. Eastern Time (USA) on Tuesday, February 3. The conference call will be web-cast live with audio and slides at www.motorola.com/investor.
Total cost savings from recent actions now expected to be approximately $1.5 billion in 2009
Company to announce fourth-quarter financial results on February 3, 2009
SCHAUMBURG, Ill. – Motorola, Inc. (NYSE: MOT) announced further cost reduction actions, primarily associated with the Company’s Mobile Devices business. The Company also announced preliminary results for the fourth quarter of 2008. The Company will announce fourth-quarter financial results on February 3, 2009.
Motorola will further reduce its workforce in 2009 by approximately 4,000 positions. This reduction will include approximately 3,000 positions associated with the Mobile Devices business and approximately 1,000 positions associated with corporate functions and other business units. The workforce reductions announced today are expected to begin immediately and are incremental to the 3,000 workforce reduction actions previously announced during the fourth quarter of 2008.
Today’s workforce reductions, plus other incremental cost-reduction initiatives, including those announced on December 17, 2008, are expected to result in additional annual cost savings of approximately $700 million in 2009. The savings from these actions, together with the $800 million of savings from other actions announced during the fourth quarter of 2008 are expected to result in aggregate cost savings of $1.5 billion for the Company in 2009.
“The actions we are taking today in our Mobile Devices business will allow us to further reduce our cost structure and positions us for improved financial performance in 2009,” said Sanjay Jha, co-chief executive officer of Motorola. “Together with these actions and the announcements made in the fourth quarter, the Mobile Devices business expects to recognize annual cost savings of approximately $1.2 billion in 2009.”
“Additionally, we are making good progress in developing important new smartphones for 2009 and are pleased with the positive response from our customers to these new devices” added Jha.
Fourth-Quarter 2008 Preliminary Results
During the quarter, Mobile Devices shipped approximately 19 million units. Sales were adversely impacted by continued weakness in end consumer demand and customer inventory reductions. The Company’s Enterprise Mobility Solutions and Home and Networks Mobility businesses continued to perform very well in a challenging environment.
“Our Broadband Mobility Solutions businesses remain strong, are substantial franchises and are continuing to perform very well,” said Greg Brown, president & co-chief executive officer of Motorola.
“The Company ended the year with a total cash* position of approximately $7.4 billion,” added Brown and Jha. “Today’s actions will allow us to further reduce costs, improve operating cash flow and help ensure that Motorola remains competitive and financially strong during these challenging times.”
Total Motorola sales for the fourth quarter of 2008 are expected to be in the range of $7.0 billion to $7.2 billion. On a GAAP basis, the Company expects a net loss from continuing operations in the range of .07 to .08 per share, including estimated net charges of approximately .06 per share relating to items typically highlighted in the Company's earnings press releases. These items include reorganization of business charges, impairments of Motorola’s investment in Clearwire and in investments in the Company’s Motorola Ventures portfolio, a previously disclosed impairment in the Company’s Sigma Fund, offset partially by a gain from the decision to freeze the U.S. pension plan, and income from the collection of a legal settlement and the extinguishment of a liability. The Company is continuing the process to close its books for the fourth quarter and has not completed the impairment testing of long-lived assets, including goodwill, or finalized income taxes. When completed, these items could result in a larger GAAP net loss for the quarter.
In addition, the preliminary results do not include any charges related to the cost-reduction actions announced today. Charges related to these additional actions will be recorded in 2009 in accordance with accounting rules. As the Company finalizes its plans related to these actions, it will disclose in a Form 8-K filed with the SEC the amount and timing of the associated charges.
Motorola’s fourth-quarter results are scheduled to be announced at approximately 7:00 a.m. Eastern Time (USA) on Tuesday, February 3. The Company will host its quarterly conference call at 8:00 a.m. Eastern Time (USA) on Tuesday, February 3. The conference call will be web-cast live with audio and slides at www.motorola.com/investor.
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