Record quarterly sales of $10.6 billion, up 17 percent versus the year-ago quarter
GAAP earnings of $0.39 per share, including income of $0.10 per share from discontinued operations and charges of $0.05 per share from items highlighted below
Record handset shipments of 53.7 million units, up 39 percent versus the year-ago quarter
Global handset market share estimated at 22.4 percent, up 3.8 percentage points versus the year-ago quarter
Positive operating cash flow of $1.6 billion
Click here to view the financial tables which are an integral part of this release Motorola, Inc. (NYSE: MOT) today reported sales, on a continuing operations basis, of $10.6 billion in the third quarter of 2006. Net earnings in the third quarter of 2006 were $0.39 per share, including $0.10 per share from discontinued operations and $0.29 per share from continuing operations, which included the items highlighted below:
EPS Impact
Stock compensation expense
$ (0.02)
Reorganization of business charges
(0.01)
Legal reserve
(0.01)
Acquisition-related in-process research & development
(0.01)
Charitable contribution to Motorola Foundation
(0.01)
Tax benefits (expense)
(0.01)
Sprint Nextel derivative gain
0.02
$ (0.05)
During the quarter, the company continued to maintain a very strong balance sheet, generating operating cash flow from continuing operations of $1.6 billion, its 23rd consecutive quarter of positive operating cash flow. In addition, the company repurchased 62 million shares of its stock for $1.5 billion.“While our third-quarter sales were slightly below our guidance, we are pleased with our earnings. Each of our business segments and total Motorola improved operating margin versus the second quarter of 2006, excluding highlighted items. Mobile Devices again achieved record unit shipments and sequentially improved its market share versus the second quarter,” said Ed Zander, chairman and CEO. “During the quarter, GSM infrastructure sales in the Europe, Middle East and Africa region were weaker than anticipated due to customer delays in capital spending. Additionally, sales of iDEN mobile devices were lower, caused by customer inventory reductions in anticipation of new dual-mode device shipments in the fourth quarter. With our strong balance sheet, leadership technologies and proven record of growth, Motorola is well positioned to continue creating value for its shareholders as one of the world’s leading technology companies.”Operating Results Mobile Devices Segment sales were $7.03 billion, up 26 percent compared with the year-ago quarter. Operating earnings increased to $819 million, including a charge of $16 million for acquisition-related in-process research and development, compared with operating earnings of $593 million in the year-ago quarter. Excluding highlighted items, the segment’s operating margin improved to 11.9 percent versus 11.2 percent in the second quarter of 2006 and 11.0 percent in the year-ago quarter, as a result of new product launches, supply chain cost reductions and higher technology and platform licensing-related income. During the quarter, Mobile Devices also: • Shipped 53.7 million units, up 39 percent compared to the third quarter of 2005 — and up 3.6 percent compared to 51.9 million handsets shipped during the second quarter of 2006. • Captured headlines by launching the highly anticipated MOTOKRZR handset, which is creating excitement among customers and consumers eager to have the industry’s newest ultra-slim and ultra-stylish handset. • Expanded global market share to an estimated 22.4 percent, up 3.8 percentage points from a year ago and up 0.3 percentage points from the second quarter of 2006. • Continued brand strength and market-share leadership in the Americas, solid No. 2 position in Asia (approximately 23 percent in China and 15 percent in India), while continuing popularity among consumers in Europe, the Middle East and Africa as new products prepared to launch and drive demand for the fourth quarter.
Signed a five-year supply agreement for iDEN handsets with NII Holdings, Inc. — Motorola’s largest customer for iDEN technology outside of the United States.
Launched eight new handsets: three for GSM, three for CDMA and two for iDEN.
Networks and Enterprise Segment sales were $2.78 billion, up slightly compared with the year-ago quarter. Operating earnings were $378 million, including net reorganization of business charges of $51 million, compared to prior-year operating earnings of $465 million, due to a highly favorable product / regional mix of sales in the year-ago quarter. Operating margin, excluding highlighted items, was 15.4 percent versus 14.6 percent in the second quarter of 2006 and 18.7 percent in the prior-year quarter. During the quarter, Networks and Enterprise also:
Announced that Sprint Nextel has selected Motorola as one of the key suppliers for WiMAX; Motorola is now participating in 18 WiMAX trials globally.
Completed the acquisition of NextNet.
Announced collaboration with Huawei Technologies, Co., Ltd. to bring an enhanced and extensive portfolio of UMTS and HSPA infrastructure equipment to customers worldwide.
Signed a contract extension with NII Holdings, Inc. for iDEN infrastructure.
Announced its intention to acquire Symbol Technologies, Inc. which, upon completion of the acquisition, will become the cornerstone of the enterprise business within Motorola’s Networks and Enterprise segment.
Announced the first network contract for Motorola’s next-generation public safety platform with Prince George’s County, Maryland, and a contract with O2 Airwave for the world’s first PDA device for use on TETRA networks.
Connected Home Solutions Segment sales were $812 million, up 9 percent compared with the year-ago quarter. Operating earnings were $21 million, including charges of $42 million for acquisition-related in-process research and development and a legal reserve, compared to prior-year operating earnings of $39 million. Excluding highlighted items, the segment’s operating margin improved to 7.8 percent versus 7.0 percent in the second quarter of 2006 and 5.8 percent in the year-ago quarter. During the quarter, the segment:
Set a new quarterly record in video, shipping nearly 2.5 million digital entertainment devices.
Subsequent to the close of the quarter, Motorola shipped the 50 millionth digital entertainment device, underscoring the company’s heritage of delivering innovations for the digital cable connected home.
Expanded its next-generation digital video portfolio, completing two acquisitions during the quarter: Broadbus, Motorola’s new On Demand Solutions business, and Vertasent, a developer of software that manages the technology elements for switched digital video networks. With these two acquisitions, Motorola has enhanced its end-to-end, switched digital video solution and software portfolio, delivering advanced video services and improved bandwidth management to pay-TV service operators.
During the quarter, Motorola On Demand Solutions (Broadbus) set a quarterly record, shipping 57,000 video streams across 17 systems.
Fourth Quarter 2006 OutlookThe company’s outlook for the fourth quarter of 2006 is for sales of between $11.8 billion and $12.1 billion, an increase of 18 to 21 percent versus the prior-year quarter.Conference Call and Web-castMotorola’s quarterly earnings conference call is scheduled to begin at 4:00 p.m. Central Time (USA) on Tuesday, October 17, 2006. Motorola plans a live web-cast of the conference call over the Internet, featuring both audio and slides. Investors can view the slides and join the web-cast at www.motorola.com/investor.Consolidated GAAP ResultsA comparison of results from operations is as follows:
Third Quarter
(In millions, except per share amounts)
2006
2005
Net sales
$ 10,603
$ 9,048
Gross margin
3,374
2,929
Operating earnings
968
1,080
Earnings from continuing operations
727
1,738
Net earnings
968
1,751
Diluted earnings per common share:
Continuing operations
$ 0.29
$ 0.68
Discontinued operations
0.10
0.01
$ 0.39
$ 0.69
Weighted average diluted common shares
outstanding
2,476.8
2,547.0
Today DataViz announced Documents To Go 9 for the Palm OS platform. Documents To Go is a mobile office suite which allows users to create, view and edit Microsoft Word, Excel and PowerPoint files as well as view Adobe PDF files on a mobile device. Version 9 has many new enhancements with the most significant being the addition of InTact Technology which ensures that ALL file formatting is kept “intact” when editing and e-mailing office files on a handheld or smartphone. Other new features include: An integrated file explorer, a new user interface, updates to Word To Go, Sheet To Go and Slideshow To Go. Customers who have a previous version or who received the Professional Edition on their Palm branded device can upgrade for $29.99.For years Documents To Go has utilized DocSync Technology to retain complex file formatting when editing files on a mobile device. This technology developed by DataViz, relies on a wired synchronization between the computer and mobile device in order to merge changes back into the original document on the desktop while retaining file formatting. With customer expectations growing and devices becoming more and more powerful, customers are now relying on their smartphones as standalone devices instead of companions to the desktop.DataViz has replaced DocSync Technology with InTact Technology in Documents To Go 9. Now files that are edited on the mobile device no longer have to rely on a wired synchronization with a desktop in order to maintain file integrity. Edited files on the mobile device can be emailed as attachments and still retain their complex file formatting including track changes, headers and footers, macros and animations to name a few. To find out more about InTact Technology and it’s benefits download a whitepaper from 
“As Palm smartphones like the Treo 700p have become more and more powerful, a need for a native document editing solution that can take advantage of this mobile computing platform becomes very important,” said Mike Rank, director of developer relations for Palm, Inc. “The addition of InTact Technology takes document editing on a wireless device to a whole new level.”The main Documents To Go office applications for the handheld have also been updated. The new enhancements include:File Explorer – An integrated file explorer has been added to the main Documents application to make browsing for files on expansion cards and internal memory easier.Word To Go – Support for viewing and editing footnotes, endnotes, comments and text boxes has been added. In addition, support for Table Of Contents has also been added.Sheet To Go – Support for XY scatter plot charts, True Type fonts including varying type faces and font sizes and additional font formatting such as italic and underline has been added. SlideShow To Go – New additions include support for native PowerPoint editing for both Macintosh and Windows users. Pricing and AvailabilityDocuments To Go Premium Edition retails for $49.99 and is available directly from DataViz, as well as many retail and online stores including CompUSA, Amazon.com and Handango.com. Upgrade pricing of $29.99 is available directly from DataViz for all previous Documents To Go customers, including those who received Documents To Go as bundled software with a Palm handheld or smartphone.Several caveats do exist for owners of older Palm OS devices wit this new release, unfortunately. The following features & file formats are no longer supported: Word 95, WordPerfect, WordPro, RTF, Palm DOC Excel 95, Quattro Pro, Lotus 1-2-3 Word 6 (Mac), Appleworks, ClarisWorks, Excel 5 Word To Go, Sheet To Go and Slideshow To Go formats Inbox To Go Sync Windows 98 and Me Margi Presenter-to-Go Bookmarks in spreadsheets In addition, devices no longer supported include: Garmin iQue 3200, 3600, 3000 Palm Tungsten T, Zire 21, Zire 31, Zire 71 Sony NX80, NX60, NX70V, NX73V, NX80V, NZ90, TG50, TH55, TJ25, TJ27, TJ35, TJ37, UX40, UX50 Tapwave Zodiac 1 The Documents To Go product line also includes support for both Symbian OS based UIQ and Series 80 platforms. For information about the features supported per platform, visit 
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