Google's Motorola Problem
Google had a great quarter, with earnings of $10.12 per share vs. analyst estimates of $10.04 per share. It’s a good day to be a Google shareholder, you’re now up over 5% or about 30 points in two days. However here’s what jumped out to me:
Motorola Revenues (hardware and other) – Motorola revenues were $1.25 billion ($843 million from the mobile segment and $407 million from the home segment), or 10% of consolidated revenues in the second quarter of 2012.Even though Motorola boosted Google revenues by $1.25B, it also posted its largest loss ever of $233mm. Note that for the entire 2011 fiscal year, Motorola posted a loss of $285mm. It’s obvious that Google is investing for the long term here but they clearly need to make some changes at Motorola before it becomes a runaway problem.
Motorola Operating Loss – GAAP operating loss for Motorola was $233 million ($192 million for the mobile segment and $41 million for the home segment), or -19% of Motorola revenues in the second quarter of 2012. Non-GAAP operating loss for Motorola in the second quarter of 2012 was $38 million, or -3% of Motorola revenues.
