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August 06, 2015

Wheelings & Dealings: Motorola Reports Falling Profits; Gets $1 Billion Investment

Motorola announced earlier this week that it has sold a billion dollar stake in the company to the private-equity firm Silver Lake. On the same day the firm also announced that it has seen a steep decline in its second quarter earnings. The company is pointing to a one-time big gain that made the year-earlier period look better than it was.

Despite that piece of bad news, Motorola is fairly bullish about the investment coming from Silver Lake. Motorola says the money infusion will allow the company to speed up its growth in the smart public-safety solutions and services businesses. The company said that it thinks all the money will be in place and it will be able to reinvest it by the end of the third quarter.

Some of the company’s struggles can also be tied to a dip in popularity when it comes to smartphones that act and look just like regular phones. The market is changing all the time and Motorola seems to be lagging behind in that particular sector. Despite that, the Chicago-based company has managed to stay afloat thanks to leaning on other departments and breaking up some of its assets like selling its scanner business to Zebra Technologies for just over $3.5 billion.

The company has said that North American sales have actually been carrying it for the last couple of months. In fact, stronger sales numbers in the United States and Canada have kept the firm from worse news as it has struggled mightily overseas. Still, the numbers aren’t good, especially when looking at year-over-year earnings. For the June quarter of this year, Motorola earned $142 million. That’s down from $824 million the year before. In total, the company saw its revenues slip 1.7 percent from the previous year to $1.4 billion.

Edited by Dominick Sorrentino

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