Stock Alert for Motorola Inc. (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 (Aug-6-10)			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	$7.94	Gross marg.	27.2%	27.8%	2.2%	n/a	35.7%	n/a
52wk Range:	$9.45-6.04	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.	18.84B
Shares Outst.	2.3B	EPS, $	-0.05	-1.87	3640%	-1.61	0.06	96.3%

Source: Reuters.com, SEC Filings.

Financial Summary

MOT recently reported sales of $5.4 billion in the second quarter of 2010. The GAAP earnings in the second quarter of 2010 were $162 million, or $.07 per share, which compares to GAAP earnings of $26 million, or .01 per share, in the second quarter of 2009. Non-GAAP financial information excludes after-tax costs of approximately $.02 per share in the second quarter of both 2010 and 2009 related to stock-based compensation expense, intangible assets amortization expense and highlighted items.

During the quarter, the Company generated positive operating cash flow of $242 million, reduced long-term debt through a $500 million tender offer and ended the quarter with a total cash position of $8.3 billion. Net cash increased to $4.9 billion from $4.6 billion in the first quarter.

Operating Results

Mobile Devices segment sales were $1.7 billion, down 6% compared with the year-ago quarter. GAAP operating earnings were $87 million, which included income from a significant legal settlement of $228 million, compared to an operating loss of $287 million in the year-ago quarter. The non-GAAP operating loss was $109 million, compared to an operating loss of $239 million in the year-ago quarter.

Home segment sales were $886 million, down 13% compared with the year-ago quarter. GAAP operating earnings were $29 million, compared to $18 million in the year-ago quarter. Non-GAAP operating earnings were $57 million, compared to $49 million in the year-ago quarter.

Enterprise Mobility Solutions segment sales were $1.9 billion, up 10% compared with the year-ago quarter. GAAP operating earnings were $181 million, compared to operating earnings of $141 million in the year-ago quarter. Non-GAAP operating earnings were $292 million, compared to $225 million in the year-ago quarter.

Networks segment sales were $967 million, down 2 percent compared with the year-ago quarter. GAAP operating earnings were $178 million, compared to $92 million in the year-ago quarter. Non-GAAP operating earnings were $191 million, compared to $147 million in the year-ago quarter.

Third-Quarter 2010 Outlook

The Company’s outlook for the third quarter of 2010 is for earnings of $.10 to $.12 per share. This outlook includes the Networks business and excludes stock-based compensation expense and intangible assets amortization expense of approximately $.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 (Aug-6-2010)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	1.86	1.21	1.59	0.73
Current Ratio (MRQ)	2.03	1.40	1.78	0.86
Long-Term Debt to Equity(MRQ)	28.74	10.82	14.28	115.99
Total Debt to Equity (MRQ)	33.99	27.19	25.43	174.26

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast amongst 30 polled investment analysts. Against the Motorola Inc company.

Analyst Detail	Buy	Outperform	Hold	Underperform	Sell	No Opinion
Latest	10	4	15	1	0	2
4 weeks ago	10	2	15	2	1	1
2 months ago	10	3	15	2	1	1
3 months ago	10	3	15	2	2	1
Last year	7	1	16	2	2	2

The 25 analysts offering 12 month price targets for MOT have a median target of 9.00, with a high estimate of 11.00 and a low estimate of 6.00. The median estimate represents a 12.22% increase from the last price of 8.02.

Source: www.ft.com

Consensus Estimates Analysis

	# of Estimates	Mean	High	Low	1 Year Ago
SALES (in millions)
Quarter Ending Sep-10	26	5,613.55	5,823.00	5,418.00	6,118.14
Quarter Ending Dec-10	25	6,141.17	6,569.20	5,726.00	6,851.41
Year Ending Dec-10	31	22,236.20	23,223.00	21,700.00	24,698.40
Year Ending Dec-11	30	23,805.80	26,922.50	19,583.00	27,774.20
EARNINGS (per share)
Quarter Ending Sep-10	30	0.11	0.14	0.08	0.07
Quarter Ending Dec-10	27	0.15	0.19	0.10	0.12
Year Ending Dec-10	34	0.41	0.49	0.30	0.28
Year Ending Dec-11	34	0.55	0.70	0.41	0.52
LT Growth Rate (%)	6	8.00	15.00	0.00	7.50

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

Investment Highlights

Second-quarter Highlights

Mobile Devices highlights:

• Introduced DROID X, a pocket-sized home theater with a 4.3 inch high-resolution display and powerful 1 GHz processor, garnering excitement and attention among media and consumers
• Introduced i1, the world’s first push-to-talk Android-powered smartphone; Motorola FLIPOUT™ with MOTOBLUR™ and  Motorola CHARM™ with MOTOBLUR™, bringing our current smartphone portfolio to 12 devices
• Broadened choice of Android applications for consumers in Argentina, Brazil and Mexico with the announcement of SHOP4APPS, Motorola’s mobile application storefront

Home highlights:

• Launched 3D TV set-top solution in North America and a next-generation HD IP set-top that supports fixed-mobile convergence solutions with KDDI in Japan
• Introduced Motorola M3 Media Server family, which delivers multimedia content and services across television, PCs and mobile devices
• Introduced Medios suite of software solutions for content distribution across multi-screen environments and advanced on-demand services
• Launched DCX700, a next-generation, cost-effective HD set-top solution that supports applications for whole-home content sharing

Enterprise Mobility Solutions highlights:

• Achieved year-over-year sales growth in all four regional markets
• Received multi-million dollar contracts in North America, including P25 system wins for counties in Georgia, Maryland, New York and Washington
• Announced ES400, the smallest and lightest enterprise digital assistant, which provides field workers access to business-critical applications to overcome productivity challenges
• Awarded the first phase of a private broadband 700MHz LTE network for public safety in the San Francisco Bay area, the first of its kind in the United States

Networks highlights:

• Announced sale of majority of Networks assets to Nokia Siemens Networks
• Completed Phase I TD-LTE field trials with China’s Ministry of Industry and Information Technology
• Introduced unique, cost-effective common platform base station solution that can be used for both WiMAX and LTE
• Introduced software release for KDDI to reuse existing CDMA base stations for LTE

MOT operated its next generation public safety architecture at APCO 2010. MOT demonstrated how the ASTRO 25 IP core would connect with a Public Safety LTE core through the Motorola Public Safety Interoperability Platform. MOT displayed innovations in Public Safety LTE with an end-to-end LTE solutions architecture delivering public safety grade priority and control to users on a live system.  Multimedia applications streamed video through a Public Safety LTE core to show how the prioritization of each user could be dynamically adjusted based on the incident, the profile of the user, and their role in the emergency response.

MOT also had on-hand specially developed, interactive tools to provide consultations on how video services might be considered on public safety broadband.  With various real-world video scenes, attendees could see for themselves how situational awareness and tactical decision making are impacted by adjusting critical video parameters.  Variables that were taken into account included frame rate, resolution, transmission throughput, and quality of service.

To demonstrate how these advanced broadband and multimedia capabilities will further transform public safety operations, MOT showcased its Integrated Multimedia Command Center.  Bringing together NG9-1-1, radio console, computer aided dispatch, and intelligent video solutions, MOT’s PremierOne common platform offers advanced applications for the next generation command center.

MOT also offered detailed discussions on the broad portfolio of Public Safety optimized LTE devices ranging from data adaptors to vehicular modems and handheld form factors.  These devices will collaborate with P25 mission critical radios over the Public Safety Interoperability Platform as well as secure device-to-device connections.

On August 2, 2010, the Company announced that Daniel M. Moloney had been named president of its Motorola Mobility business. Moloney, formerly executive vice president, president of MOT’s Home business, will begin his new role on September 1, 2010, and report to Dr. Sanjay Jha, Co-CEO of MOT and CEO of Motorola Mobility

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

Technical Analysis

Source: http://stockcharts.com

MOT is trading above its 50 day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

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 bullish signal for two reasons. First, the MACD is above the signal line, a 9day moving average. Second, the MACD is above 0 which implies that the underlying moving averages are trending higher.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Aug-6-2010	symbol	Share, $	$ Mn	2010	2011	2010	2011
Nokia Corp. (ADR)	NOK	9.57	35.84B	28.75	n/a	0.67	n/a
Research In Motion Ltd.	RIMM	52.63	29.08B	11.51	n/a	2.11	n/a
Alcetel-Lucent (ADR)	ALU	3.02	6.81B	n/a	n/a	0.34	n/a
Communications Equipment Median			23.91B	13.42	n/a	1.04	n/a
Motorola Inc.	MOT	7.94	18.48B	74.70	n/a	0.80	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHSE 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	(5.86%)

Source: Yahoo Finance

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