While first quarter earnings narrowly beat Wall Street expectations and shares rose, analysts were disappointed with Motorola's view on second quarter earnings despite company assurances it would post a profit for the full year.

Besides challenges such as stiff competition in emerging markets and criticism for a stale phone line-up, Motorola also faces a proxy battle with activist investor Carl Icahn, who has a 2.9 percent stake in the company and is seeking a board seat.

"Profitability in phones wasn't quite as bad as expected but there's not a recovery in sight," said Charter Equity Analyst Ed Snyder. "Next quarter is quite a bit of a disappointment against consensus. Wall Street was expecting them to see some recovery next quarter."

Motorola, which slashed its guidance last month, posted a first-quarter loss of $181 million, or 8 cents a share, compared with a year-ago profit of $686 million, or 27 cents a share. Revenue fell nearly 2 percent to $9.43 billion from $9.61 billion.

Excluding one-time items such as acquisition costs and a legal settlement, the company posted a profit per share of 2 cents, just above analysts' forecasts of 1 cent per share on revenue of $9.25 billion, according to Reuters Estimates.

By: DocMemory
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