Motorola woes dent Google profits

Motorola woes dent Google profits

The cost of buying handset manufacturer Motorola has hit Google, with the digital company reporting a quarterly fall in profits to $2.18bn.

Its third quarter results were posted unexpectedly to the Securities and Exchanges Commission three and a half hours ahead of schedule, which lead to trading in Google's shares being suspended. By the time trading had been suspended, shares were down 9% but they recovered slightly to end the day on 8% lower. Sales for the quarter were up 45% on 2011 to $14.10bn. However, it was the performance of Motorola that hit results. The manufacturer made an operating loss of $527m during the quarter. Google also spent $349m on restructuring the manufacturer. Sales at Motorola were $2.58bn, $1.78bn of which came from its mobile business.

Motorola is currently undergoing a restructure, with a third of its 90 offices worldwide scheduled to be closed and at least 4,000 jobs cut. The results showed 2,865 jobs have been cut at Motorola during the quarter, with the manufacturer having a headcount of 17,428.

Google CEO Larry Page apologised in a conference call to analysts about the mix-up in publishing the results earlier. At the top of the SEC filing was written 'PENDING LARRY QUOTE' rather than carrying a statement from the company's boss, indicating an early version of the results. He said: 'We had a strong quarter. Revenue was up 45 percent year-on-year, and, at just fourteen years old, we cleared our first $14bn revenue quarter. I am also really excited about the progress we’re making creating a beautifully simple, intuitive Google experience across all devices.' Page said there are more than half a billion devices running the Android OS with 1.3 million more activated each day.

Editor: Graeme Neill

Written by Mobile Today
Mobile Today


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