What's A Chopped-Up Motorola Worth? (MOT)

If Motorola does spin off its slumping, money-losing cellphone division, shareholders will be left with two segments with ungainly names: "Home and Networks Mobility" and "Enterprise Mobility Solutions." Combined, they would have accounted for $17.7 billion -- or 48% -- of Motorola's $36.6 billion 2007 revenue, with yearly revenue growth of 22%. The two segments would have recorded $1.9 billion operating profit last year; the cellphone division posted a $1.2 billion operating loss.

So what's a sliced-and-diced Motorola worth? In a note today, Citibank analyst Jim Suva does two different sum-of-parts exercises and says $16 to $17 per share, or about 33% more than the $12.65 it's trading at today.

In a price-to-sales analysis, based on 2008 estimates, Jim concludes that Mobile Devices is worth $8.14 per share, Home & Networks is worth $4.86 per share, and Enterprise Mobility is worth $3.99 per share -- that's $17. In a second, enterprise value-to-sales analysis based on 2008 sales, he gets $6.02 per share for Mobile Devices, $5.08 per share for Home & Networks, and $4.97 per share for Enterprise Mobility -- total $16.07.

See Also: Motorola Might Spin Off Cellphone Unit