Motorola Inc. reported a strong first quarter Wednesday, posting a greater-than-expected jump in profits and nabbing a bigger share of the global cell phone market.
The Schaumburg-based communications equipment-maker reported first-quarter net profits of $692 million, or 28 cents per share, up from $609 million, or 25 cents per share, during the same period last year.
Earnings from continuing operations also were 28 cents a share in the latest period, compared with 19 cents a share in first-quarter 2004.
First-quarter earnings include a one-time, 6-cent gain from the sale of stock Motorola owned in wireless carrier Nextel. But even without the one-time gain, Motorola easily beat Wall Street estimates of 19 cents a share.
First-quarter sales of $8.16 billion also topped the $7.7 billion average estimate of Wall Street analysts surveyed by Thomson First Call. Sales were up 10 percent over 2004’s first quarter.
“These are very good results,” said Brant Thompson, a stock analyst at Goldman Sachs. “Zander is doing his job right,” he said, referring to Ed Zander, Motorola’s chief executive.
Motorola’s phone sales have been strong across several models, including the Razr V3, the ultrathin phone introduced to rave reviews last fall. The Razr makes up a small fraction of Motorola’s phone sales.
“But it does drive people into the stores,” Zander said in an interview with the Tribune. “It gives you the halo effect.”
The Razr is currently available in North America only through Cingular and through a wireless technology known as GSM.
Motorola Wednesday reiterated plans to introduce a Razr-style phone as early as the fourth quarter that would run on CDMA technology.
Sprint is a major carrier of phones with code division multiple access, and Motorola has been angling to bolster its weak phone presence at Sprint. Zander declined to comment on whether the CDMA-style Razr is geared toward Sprint.
Motorola also boosted its second-quarter outlook. Wall Street had been expecting profits of 22 cents per share for the spring quarter, but Motorola said Wednesday that figure should be 23 cents to 25 cents per share.
The company’s earnings were announced after the stock market closed.
Motorola’s stock finished Wednesday at $14.93, up 21 cents. In after-hours trading, it was up another 45 cents, or 3 percent.
The world’s second-largest mobile phonemaker behind Nokia, that business makes up a little more than 50 percent of Motorola’s revenues and profits.
Global cell phone shipments totaled 28.7 million during the first quarter, while Wall Street analysts were expecting about 27 million. “That 28.7 million is a real good number, and it indicates [market] share gain,” said Mike Walkley, a stock analyst with Piper Jaffray.
Indeed, Motorola trumpeted an increase in cell phone market share from around 16 percent during the fourth quarter to an estimated 17.1 percent in the first quarter.
“That is something near and dear to my heart, we gained market share again,” Zander told analysts in a conference call.
He said Motorola has continued distancing itself from the No. 3 cell phone-maker, Samsung Electronics. “We are a much stronger No. 2,” he said.
In other earnings news:
– Caterpillar Inc. shares climbed after the heavy-equipment giant reported the most profitable quarter in its 80-year history.
More Top Picks Camp Chef Italia Artisan
The Peoria-based company said net income jumped 38 percent, to $581 million, or $1.63 a diluted share, from the year-ago period’s $420 million, or $1.19 a share. Revenue surged 29 percent, to $8.34 billion. The latest results easily topped estimates of $1.36 a share.
In New York Stock Exchange trading, shares surged to a high of $90 before closing at $88.04, up $3.09. On a day when the Dow Jones industrial average fell 115 points, Caterpillar was one of three winners in the 30-stock index and its biggest gainer.
The equipment market Caterpillar serves is highly cyclical.
After enduring two years of relatively weak conditions, the company has for more than a year been enjoying a dramatic run-up in demand for mining trucks and heavy-duty diesel engines. The improvement reflects stronger economic conditions not just in U.S. markets, but around the globe.
Nor is there any evidence that conditions have peaked. As the year progresses, “we are encouraged by the fundamental strength of the key markets we serve,” said Chairman and Chief Executive Jim Owens.
– Tellabs Inc. said first-quarter income fell, but it exceeded estimates, and quarterly revenue soared. The Naperville-based maker of telecom equipment said it earned $700,000, or break-even on a per-share basis, for the quarter on sales of $436 million. Income was down from $13.4 million a year ago, but revenue rose 65 percent.
Restructuring charges ate into profits. Excluding them, the company earned 6 cents a share, which beat estimates by 4 cents a share. It was Tellabs’ first report that includes results from AFC, a firm it acquired last year.
Chief Executive Krish Prabhu said his firm is testing new equipment that should improve profit margins by the third or fourth quarter. Tellabs’ results reflect increased spending on network upgrades by telecom carriers. “I’m very bullish,” said Prabhu.
Shares of Tellabs rose 71 cents, or 10 percent, to $7.77, on the Nasdaq stock market.
– Allstate Corp. reported an 18 percent increase in first-quarter earnings, to $1.12 billion, or $1.64 a share, from $949 million, or $1.34 a share, a year ago. Operating income was $1.67 a share, 18 cents better than estimates. The Northbrook-based insurer said revenue rose nearly 5 percent, to $8.71 billion. The report came out after the close of trading.
– Navteq Corp. posted first-quarter net income of $16.8 million, or 18 cents a diluted share, up from $9.7 million, or 11 cents a diluted share, a year ago. The Chicago-based provider of digital map data said revenue jumped 32 percent, to $104.7 million. The report came out after the close of trading.
———-