Merrill Lynch & Co. downgraded Motorola Inc., citing “increasing weakness” at its mobile-phone division that puts its third- and fourth-quarter sales at risk.
Analyst Tal Liani pointed to excess inventory of mobile phones in China and competition from new cell phone models in the second half of the year for the downgrade.
Liani expects third-quarter earnings to be 17 cents per share and fourth-quarter earnings to be 20 cents per share. He lowered his rating on the company from buy to neutral.
Shares of Motorola were trading down about four points at $15.05 each mid-day Wednesday.
In other Motorola news, the company renewed its agreement with CellStar Corp. under which CellStar has distributed Motorola wireless products in the United States since 1989.
“This renewed agreement with Motorola further confirms CellStar’s position as the primary distributor of Motorola wireless handsets in the U.S.,” said Robert Kaiser, CellStar’s chief executive officer. “We remain a dominant force within the regional carrier channel providing Motorola handset distribution, product training and service support. CellStar is proud to continue our relationship with Motorola retailers and carriers and remains committed to providing them an unparalleled level of support.”
