Motorola Rises After Saying It May Drop Mobile Phones
Feb. 1 (Bloomberg) -- Motorola Inc., which has lost mobile- phone market share to all of its major rivals, rose the most in almost four years in New York trading after saying it may bow to shareholder pressure and shed its money-losing handset unit.
Chief Executive Officer Greg Brown said yesterday that the Schaumburg, Illinois-based company is exploring its options, including a possible separation of its mobile-devices business.
The announcement pleased investors including billionaire Carl Icahn, who have demanded that the company dispose of the unit. The business, which accounts for about half of Motorola's revenue, lost $388 million last quarter as customers defected to phones from Samsung Electronics Co. and Apple Inc.
``Enough people, from Carl Icahn to many others, have suggested that this is the best thing for Motorola to do,'' said Mark Mowrey, a Laguna Beach, California-based analyst at Al Frank Asset Management, which owns Motorola shares. ``I hope it's not a reaction from the executive side to a lot of the near-term sentiment the company is hearing from investors.''
Motorola jumped $1.11, or 9.7 percent, to $12.61 at 3:31 p.m. in New York Stock Exchange composite trading, the most since April 2004, after rising 13 percent to $12.97 earlier. The stock had fallen 42 percent in the past year before today.
Citigroup Inc. upgraded the shares to ``buy'' from ``hold'' after the announcement.
Motorola's phone shipments plunged 38 percent last quarter after it lost customers to Apple's iPhone and camera phones from Samsung. That brought Motorola closer to losing its spot as the third-largest handset maker in the world.