Stock Alert for Motorola Inc. (MOT)

Motorola Inc. (NYSE: MOT)

Motorola Inc. (MOT) provides technologies, products and services for mobile phones. Its portfolio includes wireless handsets, wireless accessories, digital entertainment devices, set-top boxes and video distribution systems, analog and digital two-way radios, wireless and wireline broadband network products, and end-to-end enterprise mobility products. The Company operates under three segments: Mobile Devices segment, Home and Networks Mobility segment and Enterprise Mobility Solutions segment. In April 2009, the Company completed the sale of its biometric business unit, including the Printrak trademark, to Safran SA, through its wholly owned subsidiary, Sagem Securite. In January 2010, the Company acquired SecureMedia from Innovation Advisors. In February 2010, the Company acquired BitBand, a provider of content management and delivery systems, specializing in video on demand for Internet protocol television (IPTV).

The Company was founded in 1928 and is based in Schaumburg, Illinois.

Share Statistics (Jul-13-10)			FY 2007	FY 2008	% Chg	Q4 2008	Q4 2009	% Chg
Symbol	MOT	Revenue, $Mn	36.62B	30.15B	17.7%	7.14B	5.72B	19.9%
Current price	$6.99	Gross marg.	27.2%	27.8%	2.2%	n/a	35.7%	n/a
52wk Range:	$9.45-5.91	Oper. margin	-1.7%	-9.5%	458.8%	n/a	2.6%	n/a
Avg Vol (3m):	28,087,500	Net margin	-0.1%	-14.1%	14000%	n/a	2.4%	n/a
Market Cap.	16.25B
Shares Outst.	2.3B	EPS, $	-0.05	-1.87	3640%	-1.61	0.06	96.3%

Source: Reuters.com, SEC Filings.

Financial Summary

Financial Highlights

• First-quarter sales of $5.0 billion
• First-quarter GAAP earnings of $0.03 per share, compared to a loss from continuing operations of $0.13 per share in first quarter 2009; first-quarter 2010 GAAP earnings include income of $0.01 per share from highlighted items
• Total cash of $8.5 billion, a sequential increase of $455 million
• Enterprise Mobility Solutions sales of $1.7 billion; operating earnings of $141 million
• Mobile Devices sales of $1.6 billion; shipped 8.5 million handsets, including 2.3 million smartphones; operating loss of $192 million
• Networks sales of $896 million; operating earnings of $112 million
• Home sales of $838 million; operating earnings of $20 million

MOT recently reported sales of $5.0 billion in the first quarter of 2010. The GAAP earnings in the first quarter of 2010 were $69 million, or $0.03 per share, which compares to a GAAP loss from continuing operations of $291 million, or $0.13 per share, in the first quarter of 2009.

First-quarter 2010 GAAP earnings include net income of $0.01 per share from highlighted items, which are described at the end of the press release. GAAP earnings per share also include non-cash expenses for stock-based compensation and amortization of intangibles totaling $0.04 per share in the first quarter of 2010. Further details are outlined at the end of this press release. During the quarter, the Company generated positive operating cash flow of $485 million and ended the quarter with a total cash position of $8.5 billion.

Operating Results

MOT’s Mobile Devices segment sales were $1.6 billion, down 9% compared with the year-ago quarter. The GAAP operating loss was $192 million, a significant improvement compared to the operating loss of $545 million in the year-ago quarter.

Second-Quarter 2010 Outlook

The Company’s outlook for the second quarter of 2010 is for earnings of $0.07 to $0.09 per share. This outlook now excludes stock-based compensation and amortization of intangibles expenses of approximately $0.04 per share, as well as charges associated with items of the variety typically highlighted by the Company in its quarterly earnings releases.

Financial Strength (Jul-13-2010)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	1.86	2.27	1.32	0.79
Current Ratio (MRQ)	2.02	2.61	1.55	0.94
Long-Term Debt to Equity(MRQ)	33.91	20.42	16.96	136.64
Total Debt to Equity (MRQ)	39.26	34.53	27.83	204.63

Source: Reuters.com, SEC Filings.

Analyst Consensus

Buy

Outperform

Hold

Underperform

Sell

No Opinion

This is the consensus forecast among 31 polled investment analysts. Against the Motorola Inc company.

Analyst Detail	Buy	Outperform	Hold	Underperform	Sell	No Opinion
Latest	10	2	15	2	2	1
4 weeks ago	10	3	15	2	2	1
2 months ago	10	3	15	2	2	1
3 months ago	10	4	14	2	2	1
Last year	5	3	18	2	2	1

The 23 analysts offering 12-month price targets for MOT have a median target of 8.75, with a high estimate of 11.00 and a low estimate of 4.80. The median estimate represents a 25.18% increase from the last price of 6.99.

Source: www.ft.com

Consensus Estimates Analysis

	# of Estimates	Mean	High	Low	1 Year Ago
SALES (in millions)
Quarter Ending Sep-10	20	5,513.08	5,885.00	5,210.00	6,400.66
Quarter Ending Dec-10	20	6,095.40	6,644.00	5,400.00	7,066.77
Year Ending Dec-10	26	21,971.70	22,799.00	21,264.00	25,342.90
Year Ending Dec-11	27	24,009.10	27,930.00	21,478.00	28,205.80
EARNINGS (per share)
Quarter Ending Sep-10	18	0.10	0.13	0.08	0.06
Quarter Ending Dec-10	18	0.15	0.19	0.09	0.11
Year Ending Dec-10	23	0.39	0.47	0.31	0.24
Year Ending Dec-11	27	0.54	0.72	0.40	0.48
LT Growth Rate (%)	6	7.17	10.00	0.00	8.78

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=MOT

Investment Highlights

Mobile Devices highlights:

• Shipped 8.5 million units, including 2.3 million smartphones; continued to strengthen North America position and shipped smartphones to carrier, distributor and retail customers globally
• Introduced six new Android-powered smartphones: BACKFLIP™, QUENCH™/CLIQ XT™, DEVOUR™, as well as three products designed for the Asia market, the MOTO XT701, MT710 and XT800, bringing MOT’s smartphone portfolio to eight
• Introduced SHOP4APPS, an application store, currently available for MOTs consumers in China to enhance their Motorola Android experience

Home segment sales were $838 million, down 18% compared with the year-ago quarter. GAAP operating earnings were $20 million, compared to $3 million in the year-ago quarter.

Home highlights:

• Shipped 3.1 million digital entertainment devices
• Announced QIP eco-friendly set-top boxes for Verizon FiOS™ customers
• Introduced innovative 3DTV set-tops for cable, significantly enhancing 3D experience for consumers
• Strengthened North America position and secured wins with four customers to support the delivery of ultra   broadband triple play services

Enterprise Mobility Solutions segment sales were $1.7 billion, up 6% compared with the year-ago quarter. GAAP operating earnings were $141 million, compared with operating earnings of $66 million in the year-ago quarter.

Enterprise Mobility Solutions highlights:

• Secured one of the single largest TETRA terminal contracts ever awarded in Europe, including more than 50,000 terminals, from the German Federal Ministry of Interior
• Received several North America contracts, including a number of multi-million dollar awards from cities, and three statewide expansion wins, including Michigan and Wyoming
• Announced a series of rugged digital bar code scanners for harsh industrial environments, and launched the first cordless digital imager designed for healthcare
• Continued momentum in retail and in transportation and logistics, including a win with Con-Way, a leader in freight transportation and logistics, for the selection of the MC75 mobile computers

Networks segment sales were $896 million, down 7% compared with the year-ago quarter. GAAP operating earnings were $112 million, compared to $62 million in the year-ago quarter.

Networks highlights:

• Announced contract with Zain for the first LTE network deployment in Saudi Arabia
• Achieved first over-the-air TD-LTE data sessions at the Expo Center for World Expo 2010 in Shanghai; selected by China Mobile Communications Corp. to provide indoor TD-LTE coverage at the World Expo
• Shipped 2 million WiMAX CPE and dongles, doubling cumulative shipments in just five months

Recent News

MOT recently announced the upcoming availability of Motorola CHARM(TM), a touch screen smartphone with Android(TM) 2.1, MOTOBLUR(TM) enhancements.

Motorola CHARM is expected to be available this summer exclusively in the U.S. for customers of T-Mobile USA Inc.

Motorola CHARM provides consumers all the features of a smartphone with the intuitive navigation of a 2.8 inch touch screen. The BACKTRACK navigation pad, located on the back of the smartphone directly behind the home screen, is similar to a laptop touch panel and enables an unobstructed view of the Web, texts, e-mails and news feeds. Plus, with Android 2.1 and enhanced MOTOBLUR features, CHARM offers new customization and filtering options.

Motorola CHARM will be the first device in the U.S. to feature an enhanced version of MOTOBLUR built on Android 2.1, which syncs contacts, posts, messages, photos and much more in easy to manage streams — from sources such as Facebook(R), MySpace, Twitter(TM), Gmail(TM), work and personal e-mail.

MOT shares are down more than 12% this year on concerns that the wireless titan is falling behind in the smartphone race. MOT’s phone turnaround plan is key to the Company’s planned split and standalone plan.

The Company’s original Droid sold well at Verizon over the past year, but MOT needs much more in terms of popular phones and additional telecom partners if it hopes to contend with the likes of Research In Motion, HTC and Apple.

Source: http://www.motorola.com/us , www.yahoo.com

Technical Analysis

Source: http://stockcharts.com

Friday, MOT closed above its 13-day moving average. This is generally considered to be an indication of a bullish trend.

MOT’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, MOT is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

The MACD for MOT currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of zero, which implies that the underlying moving averages are trending lower.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Jul-13-2010	symbol	Share, $	$ Mn	2010	2011	2010	2011
Nokia Corp. (ADR)	NOK	8.41	31.50B	22.12	n/a	0.63	n/a
Research In Motion Ltd.	RIMM	53.79	29.72B	11.76	n/a	1.84	n/a
Alcetel-Lucent (ADR)	ALU	2.72	6.15B	n/a	n/a	0.32	n/a
Communications Equipment Median			22.45B	16.94	n/a	0.93	n/a
Motorola Inc.	MOT	6.99	16.25B	65.68	n/a	0.72	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	n/a	0
Sales	28,348	1
Net Shares Purchased (Sold)	(28,348)	1
Total Insider Shares Held	206.38M	n/a
% Net Shares Purchased (Sold)	0.0%	n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	(96,107,200)
% Change in Institutional Shares Held	(5.87%)

Source: Yahoo Finance

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