Sanjay Jha, co-CEO of Motorola and CEO of Motorola Mobile Devices, speaking at a mobile Internet conference in 2009. (AP Photo/Paul Sakuma)

By Wailin Wong | Motorola
Inc. posted a profit in the first quarter, with smartphone sales helping the flagship mobile devices business turn around a heavy loss from a year earlier.

The Schaumburg-based technology company reported a net profit of $69 million, or 3 cents per share, reversing a loss of $231 million, or 10 cents per share, in the first quarter of 2009. Overall sales for the company fell to $5 billion from $5.4 billion a year ago.

Motorola’s mobile devices division posted sales of $1.6 billion, a decline of 9 percent from the same quarter last year. But the unit’s operating loss came to $192 million, substantially narrower than a loss of $545 million in 2009. Co-Chief Executive Sanjay Jha told analysts on a conference call that he expects the business to become profitable in the fourth quarter of this year.

Motorola, which has pinned its mobile devices turnaround strategy on phones that run Google’s Android operating system, said it shipped 8.5 million phones during the quarter. Of those devices, 2.3 million were smartphones, a category that Motorola had been largely absent from until Jha put the Android strategy in place. The company’s smartphone portfolio now numbers eight devices; six of them were introduced during the first quarter.
 
On a conference call with analysts, Jha said Motorola is on track to release about 20 smartphones this year, with total shipments numbering between 12 million and 14 million units. The volume forecast is revised slightly upward, as Jha had previously put the low end of the range at 11 million units.
 
The majority of the new phones will feature Motoblur, the company’s proprietary Web-based service that aggregates social networking information and pushes updates to devices in realtime. Jha said Motoblur will evolve this year to incorporate “new functionality in areas such as multimedia consumption and music.”
 
Jha also said he’s confident Motorola will hold its own in a tough market for smartphones, as new Android devices from other manufacturers compete for consumers’ attention. Today is the launch date for the Droid Incredible, a new smartphone made by Taiwanese company HTC that will be available at Verizon Wireless. The Droid Incredible has been receiving a major marketing from Verizon, partially supplanting Motorola’s Droid phone – launched last year – as the premiere Android device at the carrier.
 
“This is a very competitive marketplace,” Jha said in a response to an analyst’s question. He added: “We have taken the competition and the competitive environment into account when we provide you guidance, obviously, and I feel we are well-positioned to compete at each of our carriers.”
 
Among Motorola’s other divisions, its Home business posted earnings of $20 million, up from $3 million in the year-ago quarter, despite an 18 percent drop in sales. The unit makes cable television set-top boxes and, as of a February reorganization, is now under Jha’s purview.
 
Co-Chief Executive Greg Brown oversees Enterprise Mobility Solutions, which makes communications gear for government and business clients, and Networks, which makes equipment for wireless carriers. Enterprise Mobility
saw profit jump to $141 million in the first quarter from $66 million a year earlier, with sales up 6 percent. The Networks division posted earnings of $112 million, up from $62 million a year ago. Sales fell 7 percent.
 
Motorola is planning to divide into two, independent publicly traded companies in the first quarter of 2011. Executives said they are making progress and will provide a more detailed update later this summer.