Earnings Preview: Motorola Mobility to report 3Q

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SAN FRANCISCO (AP) — Motorola Mobility Holdings Inc., which split off from the rest of Motorola early this year, will report its third-quarter results Thursday after the market close. Investors will watch for growth in sales of smartphones in what could be one of Motorola Mobility’s last quarters as an independent company.

Google Inc. is expected to acquire Motorola Mobility early next year. The search leader’s $12.5 billion acquisition offer is undergoing an extensive review by the U.S. Justice Department.

WHAT TO WATCH FOR: Motorola not been able to bring to market a cell phone that comes close to matching the popularity of the Razr cellphone, introduced in 2005. But it has been able to reposition itself as a maker of smartphones that use Google’s Android operating software.

During the second quarter, the Libertyville, Ill. company shipped 11 million phones total, of which about 40 percent, or 4.4 million, were smartphones.

Seeking an edge in the high-tech phone world, Motorola recently said it’s bringing back the “Razr” name for a thin smartphone that runs Android and will use Verizon Wireless’ new high-speed wireless data network.

WHY IT MATTERS: Motorola has been trying to recapture its spark for years. Smartphones are the linchpin of the company’s turnaround strategy. But the smartphone market is fast-moving and incredibly competitive. Motorola competes with Apple Inc., which sold 17.1 million iPhones in its most recent quarter, and Samsung Electronics Inc., among other companies.

WHAT’S EXPECTED: Analysts polled by FactSet expect adjusted net income of 6 cents per share on $3.38 billion in revenue. In July, Motorola predicted that third-quarter adjusted earnings would range from break even to 10 cents per share.

LAST YEAR’S RESULTS: In the third quarter of 2010, Motorola Mobility was part of the old Motorola Inc. Revenue from the mobile device and the cable set-top box businesses that now make up the company totaled $2.91 billion during that quarter.