The Schaumburg, Ill., communications equipment maker said it appointed Stuart Reed president of its Mobile Devices division, replacing the duo of Ray Roman, head of sales, and Terry Vega, head of global devices, who were jointly running the outfit.

Vega is leaving the company "for personal reasons but will work with Reed on the transition," a spokeswoman for Motorola said. Rita Lane, the company's chief procurement officer, will assume Reed's old job as head of Motorola's integrated supply chain organization.

Motorola said sales for the quarter ended June 30, would be between $8.6 billion and $8.7 billion, a decline of about 8 percent from the $9.4 billion the company recorded in the first quarter. Motorola had previously indicated second quarter sales would be about even with the first quarter.

Today's announcement wasn't completely surprising as analysts had been saying Motorola faced stiff competition in the wireless handset market. Some research firms were predicting that the company's market share would slide during the quarter.

The recent debut of Apple Inc.'s iPhone wireless phone and digital music player combo is expected to further put pressure on Motorola.

Still, the amount of the second quarter revenue shortfall disclosed today by Motorola is a lot larger than many analysts were expecting, clearly demonstrating the company is having greater problem getting consumers to buy its wireless products in Europe and Asia. The consensus analysts' revenue estimate for the second quarter was approximately $9.3 billion although forecasts ranged from $8.7 billion to $10.2 billion.

"The company's shortfall in sales and earnings for the second quarter is primarily attributable to lower overall unit volumes in the Mobile Devices business in Asia and Europe," Motorola said, in a statement.

"The company expects second quarter Mobile Devices shipments to be approximately 35 to 36 million handsets," it added. "The company's Mobile Devices business is expected to have a larger operating loss in the second quarter as compared to the first quarter."

Motorola added that it expects to post a loss of 2 cents to 4 cents per share from continuing operations for the second quarter and added that its mobile device unit will report "a larger operating loss in the second quarter as compared to the first quarter."

The division will be profitable for the full year, however, the company added.

By: DocMemory
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