Page 1 of 12

Motorola Mobility Analaysis

Continues for 11 more pages »
Read full document

Motorola Mobility Analaysis

Page 1 of 12
MOTOROLA
Integrated Company Analysis
By, Team B12
Boryana Georgieva, Justin Owen, Asa Shiverick, Maureen Tuhairwe, Ken Wooddell December 16, 2010

Agenda
Current Situation Financial Analysis Mobile Industry Trends Marketing Analysis Recommendations

2

Motorola’s Current Segments
Historical
% of Sales
Mobile Devices

As of Q3 2010
% of Sales
Mobile Devices 39% 42% Home & Networks* Enterprise Mobility Solutions

32%

32%

Home & Networks* Enterprise Mobility Solutions

36%

19%

*Note: The decline in the Home & Networks segment is due to the discontinuation of the networks business Source: Motorola, Inc. 3

Motorola Mobility
January 4, 2011 MOT

MSI

MMI

Motorola Solutions, Inc. Motorola Mobility Holdings, Inc. • Contains Enterprise Solutions, and • Contains current Mobile Division remainder of Networks Mobility and Home Segment (iDen) • Approximately 60% of current • Approximately 40% of current business business • Will have zero debt 4

Agenda
Current Situation Financial Analysis Mobile Industry Trends Marketing Analysis Recommendations

5

Financial Statements Overview
• Motorola (MOT) has experienced declining sales every year since 2007, resulting the following losses: Operating losses: 2007: $553 million 2008: $2.4 billion 2009: $148 million Net Loss: 2007: $35 million 2008: $4.2 billion 2009: $51 million

• 2010: On pace for first profitable year since 2006
– Through 10/2/10:
• Operating earnings: $411m • Net Income: $340m
6

Notable Changes: Inventory
• Motorola’s mobile segment significantly lowered inventory due to supply chain improvements: – December, 2008: $1.846 billion – December, 2009: $688 million

7

Notable Changes: Debt
• 2008 year end:
– Long-term debt: $4,092 million – Debt-to-Equity ratio: 44%

• Debt Repurchased:
– 2009: $199 million – 2010: $500 million – Debt-to-Equity ratio: 32.5% (10/2/10) 8

Changes in Accounting Standard
• New FASB standards for smartphone...