Motorola Still Foundering, No Quick Fix In Sight (MOT)

No signs of improvement at Motorola (MOT), whose to-be-spun-off cellphone division continues to suck wind. So RBC analyst Mark Sue has cut his estimates on unit sales, average sales price, and EPS.

Sue writes that Motorola is "replying on a stop gap handset product portfolio" that's not likely to compete well against Research In Motion (RIMM), Samsung, Apple (AAPL), LG, or even Nokia (NOK), which is trying to increase its small U.S. presence. He expects Motorola to sell 25 million phones this quarter, down from his previous guess of 28 million.

Sue expects profits to fall, too. He thinks Motorola will post a 5 cents per share loss this quarter, a penny worse than his previous estimate of 4 cents -- and 2 cents below consensus (3 cents per share loss). For the full year, he's expecting an 8 cents per share loss, a nickel below his previous estimate of 3 cents -- and 11 cents below consensus (3 cents per share profit).

His prescription for Motorola: Platform devices (like iPhone OS X, RIM BlackBerry, etc.), single-chip 3G devices, and "compelling design all wrapped into [a] device which connects to a Motorola-specific user site." That, Sue thinks, could help Motorola regain market share. We agree. But that would be easier if they could find someone to run the company.

Sue isn't the only analyst beating up on Motorola this week -- see more reports summarized by Barron's editor Eric Savitz. "Our fears regarding further market share loss at Motorola look like they are being realized," Nomura's Richard Windsor writes, adding that he expects market share losses to get even worse later this year. And Global Crown Capital's Tero Kuittinen calls Motorola's product roadmap a "half-based mess." So if you're a zig-when-they-zag investor, the message is clear here: Time to go long on MOT.

See Also:
Motorola's Top Cellphone CEO Pick Pulls Out. What's Left?
Motorola Q1 Dismal, Loss Widens, No Update On Spinoff
Should Motorola Put Its Phone Business To Sleep?