1:00PM New York - Motorola Inc. reports fourth quarter revenue decline 18% on sluggish mobile phone sales.

Revenue Review

Motorola Inc. reported fourth quarter net sales decline of 18.2% to $9.65 billion from $11.79 billion a year earlier, as sales of cell phones fell.

In the quarter, sales from the Mobile Devices division sank 38% to $4.8 billion, with 40.9 units sold.

Motorola said sales from the Home and Networks Mobility unit rose 11% to $2.7 billion.

Enterprise Mobility Solutions segment sales gained 35% to $2.1 billion lifted by strong sales from the Symbol business acquired in early 2007.

For fiscal 2007, Motorola posted net sales of $36.62 billion, down 14.5% from $42.85 billion reported same period in 2006.

Earnings Review

Motorola said fourth quarter net income crashed 85.4% to $100 million compared with $683 million posted in the year ago quarter.

Earnings dropped 77.3% to 4 cents per share from 21 cents per share a year ago.

Included in the earnings numbers are net charges of $0.09 per share related to a legal settlement, workforce reductions and a write-down of assets.

Analysts polled by Thomson Financial had estimated earnings of 13 cents per share on revenues of $9.60 billion.

In the quarter, gross margin rose to $2.54 billion from $2.51 billion previously.

For full-year 2007, Motorola posted a loss of $49 million or 2 cents per share from a profit of $3.66 billion or $1.46 per share.

Segment analysis

The Mobile unit, Motorola’s biggest division, reported an operating loss of $388 million from earnings of $341 million in 2006, as mobile sales declined. In 2007, the segment reported sales decline of 33% to $19 billion.

“We are focused on aggressively rationalising the company''s cost structure and working to get Mobile Devices back on track,” said Greg Brown, chief executive officer of Motorola.

Despite falling revenues, the unit managed to introduce nine new phones in the quarter, including the U9, W-Series handsets and the luxury edition of RAZR2.

Operating earnings from the Home and Networks Mobility division fell 17.6% to $192 million from $233 million a year earlier while full-year sales gained 9% to $10 billion.

During the quarter, the segment shipped 3.4 million digital entertainment devices; 50 million cable modem and introduced a variety of products such as Mpeg-4 HD set tops, capable of advanced video services and media storage amongst others.

At Enterprise Mobility Solutions, operating income rose to $451 million from $323 million previously.