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Motorola's weak revenue continues to drag on Google's earning

News by Andrew Kameka on Thursday October 17, 2013.

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Google has plenty of reasons to smile based on today's earnings report of $14.9 billion, a 12 percent increase compared to same period last year. Motorola, the company that Google paid $12.5 billion to acquire in 2011, was not among them. The Motorola Mobile Segment Revenues generated $1.18 billion in the third quarter of 2013, down from the $1.78 billion earned during the same period in 2012.

Motorola has yet to provide any profit to Google, and it probably will not in the short term. Motorola had an operating loss of $248 million, up from $192 million in losses last year. Motorola has consistently lost money since Google acquired the company. Motorola has not earned a profit during its tenure as a Google subsidiary, but the drop in losses is less than it was in July.

CFO Patrick Pichette previously warned investors that it would take Google time to see gains from Motorola. Motorola has moved out of several international markets and focused on high-end devices released in the U.S. The most recent quarter ended September 30 and includes only one month of sales from Motorola's flagship product, the Moto X. It also includes sales from the Verizon DROID Ultra, DROID Mini, and DROID Ultra MAXX. Better signs of the success or failure of Google's first attempt at rehabbing Motorola will be available next quarter, the first full sales period with availability of the Moto X and DROID devices.

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Andrew Kameka
Andrew is based in Miami, Florida.

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