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Last updated: Friday, July 31, 2009

Helped by deep cost cuts, Motorola Inc. on Thursday posted an unexpected profit for the second quarter after several quarters of losses, and said it expected things to keep improving this year. While sales continued to decline from last year, Motorola said the cost cuts, including 8,000 layoffs so far this year, set the stage for a comeback from its long-suffering cell phone unit. Its shares surged on news of the outlook. The Schaumburg, Ill.-based electronics company earned $26 million, or 1 cent per share, in the three months ended July 4. That’s up from $4 million, or break-even per share, a year ago. The latest results were boosted 2 cents per share by various one-time effects, but even so, Motorola exceeded its own forecast, which called for a loss of 3 cents to 5 cents per share, excluding the cost of its restructuring initiatives. Analysts polled by Thomson Reuters had on average been looking for a loss of 4 cents per share. Motorola’s sales fell 32 percent from a year ago to $5.5 billion from $8.1 billion a year ago. Analysts were looking for revenue of $5.6 billion for the latest quarter. “We will further improve earnings in the second half of the year,” co-CEO Sanjay Jha told analysts and investors on a conference call. For the third quarter, the company now expects results in a range from a loss of 1 cent per share to a profit of 1 cent per share. Analysts had been expecting a 1-cent loss. Motorola shares rose 60 cents, or 9 percent, to $7.17 in morning trading after rising as high as $7.68 earlier, the highest level since October. The shares had already risen 58 percent this year, as investors have overcome the worst of their pessimism and have started to look for signs of a turnaround. Motorola’s sales have been on…

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Motorola Posts Unexpected Second-Quarter Profit

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