Ed Zander, the company's chief executive officer dealing with a swirl of speculation about his future tenure at the company, will apparently keep his post.
Motorola shares had been halted right after the market closed with news pending.
The company is now offering a new revenue range of $9.2 billion to $9.3 billion. Thompson's consensus estimate for the company's first quarter had been around $10.46 billion. The company now forecasts an earnings per share loss of 7 to 9 cents. The Street had anticipated a 17-cent per share profit.
Motorola also says it will increase its stock repurchase program by $2 billion to $7.5 billion.
Greg Brown has been appointed to the roles of President and Chief Operating Officer. Thomas Meredith will assume the position of Chief Financial Officer.
In the company's news release, CEO Ed Zander says: "Performance in our Mobile Devices business continues to be unacceptable, and we are committed to restoring its profitability. After a further review following the leadership change in our Mobile Devices business, we now recognize that returning the business to acceptable performance will take more time and greater effort."
"The steps we are announcing today will enable Motorola to perform better for our shareholders, customers, partners and employees. I am confident Motorola has the right assets, brand and intellectual property, as well as a strong heritage of innovation and a strong balance sheet -- all of which we will draw upon in the coming months," added Zander.
"Motorola has a proven track record of returning capital to shareholders and we regularly review the company's capital allocation strategy. Today's announcement to accelerate $2.0 billion of share repurchases and increase the size of our current share repurchase program to $7.5 billion demonstrates our ongoing efforts to deliver superior shareholder value," said Zander.
Pablo Perez-Fernandez, the wireless analyst at G-Square Asset Management called the news a financial "train wreck" for the wireless handset manufacturer, saying the news shows just how dire the financial picture has become for the company.
He also says that the news could bolster speculation surrounding a possible deal for Motorola to take out Palm, in what CNBC has already reported as a real possibility in pre-market action Thursday morning. Earlier in the day, CNBC reported that a "major shareholder" in Palm stock who would not be identified, said a $2 billion deal between the two was imminent, and would be announced just hours before Palm was scheduled to release its Third Quarter financials.
Perez-Fernandez says the Motorola news indicates a complete meltdown of the company's margins and average selling prices (ASP's) for mobile handsets. Buying a company like Palm, he says, would not only lift margins because of the higher-capability, higher-priced "smart phones" that Palm is known for, but would also help Motorola lift ASP's as well.
While Palm is dramatically smaller than Motorola, selling just shy of 5 million handsets last year to the more than 217 million that Motorola sold, the company's focus on smartphones is compelling since it's the sector of handsets growing faster than any other. Motorola has dabbled in smartphones, but its "Q" has not met the early success company officials had hoped. Also, Motorola has been unable to crack Research in Motion's stranglehold on enterprise/business customers with its Blackberry juggernaut. The conventional wisdom around a Motorola buy-out of Palm says that the deal could give Motorola a critical entree into the lucrative, higher-margin enterprise market.
No word on any news connected to the possibility of a Palm acquisition. But a Wall Street source tells me that Palm is organizing an all-hands meeting for employees on Friday.
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