Motorola Mobile Devices Generate $87 Million Profit

Focus remains on the recovery of Motorola's mobile phone operations as the company preps for a split early next year.

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Motorola reported a higher profit in its second quarter on Thursday as the communications equipment supplier appeared to position itself for a successful breakup early next year.

The mobile devices unit reported a slight sales drop of 6% to $1.7 billion, but the operation had a profit of $87 million, although a legal settlement figured into the profit. Last week, Motorola jettisoned most of its networks business to Nokia Siemens Networks for $1.2 billion.

The chief focus remains on the slow recovery of Motorola's mobile phone operation, which has successfully launched several handsets based on Google's Android platform.

"The Droid X launch has been very well received and is seen as one of the best smartphones in the market today," said Sanjay Jha, Motorola co-CEO and CEO of Motorola Mobility, in a statement. "As we continue to execute on our business strategy, we are in a strong position to continue improving our share in the rapidly growing smartphone market and improving our operating performance."

While Jha, a former top executive at Qualcomm, has executed a solid comeback for Motorola, the mobile phone operation is now faced with a strong lineup of competitors including Apple's iPhone, Research in Motion's BlackBerry, Sprint's EVO, and a host of Asian competitors including HTC, Samsung, and LG. Motorola plans to spin off the mobile phone/set-top box operation next year as a separate operation to be called Motorola Mobility.

Jha appears to be basing his next act on the convergence of mobile devices with home devices, which feature set-top boxes. On Thursday, Jha said, "the mobile devices and home businesses remain focused on developing next-generation products to capitalize on the convergence of mobile experiences and home entertainment."

Sales at Motorola's home segment were $886 million -- a drop of 13% from the like year-ago quarter. Earnings were $29 million. The operation introduced several set-top solutions and multimedia servers.

Motorola's other co-CEO, Greg Brown, who is CEO of Motorola Solutions, noted that Motorola's enterprise mobility solutions reported sales of $1.9 billion -- up 10% -- and earnings of $181 million -- up from $141 million year over year.

Brown noted that the unit was awarded the first phase of a private broadband 700-MHz Long-Term Evolution network for public safety. Motorola lost out as a key supplier for Verizon Wireless' first major U.S. LTE network, and the public safety contract enables Motorola to stay in the LTE game in the United States, as carriers and network suppliers begin switching over to the ultra-fast LTE technology.