(Associated Press via NewsEdge) Motorola shares sank to a two-year low as analysts said there was no immediate end in sight for the cell phone maker's financial problems.
Analysts rushed to downgrade the company's stock one day after Motorola shuffled its top management and announced its first-quarter sales would fall more than $1 billion short of earlier projections.
'We believe it will take Motorola more than one year to turn around its handset business,' Davenport & Co. analyst F. Drake Johnstone wrote in a research note.
The world's No. 2 cell phone maker said slumping sales in its mobile phone unit, which accounts for more than two-thirds of its sales, are largely to blame for is shortfall.
Earlier this year, CEO Ed Zander pledged the mobile phone unit would return to double-digit operating profitability in the second half of 2007.
Motorola said it also would report a first-quarter loss in mid-April. The company said it now expects sales for the January-to-March quarter of $9.2 billion to $9.3 billion.
It also expects sales, profitability and operating cash flow for the full year to be 'substantially' below its prior guidance. Still, Zander said he was confident a gradual recovery in the second half would help Motorola eek out a full-year profit.
'While the pre-announcement was not a big surprise, the magnitude of the miss was,' BMO analyst John Bucher wrote in a research note Thursday.
Shares, already down 29% from last October's six-year-high, tumbled $1.24, or 6.6%, to close at $17.50 on the New York Stock Exchange, its lowest closing price since June 1, 2005.
Motorola also replaced its CFO and named a new president and COO, acknowledging deeper problems than it had just a month ago when its cell-phone chief left under pressure.
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