Last month Motorola CEO Ed Zander said the company’s performance was
unacceptable and pledged to restore its ailing cell phone business and
breathe
life into its drifting share price. But if the company does not offer some
sound evidence of a turnaround strategy when it reports first quarter earnings
results on Wednesday, Carl Icahn could win influence with shareholders in his
efforts
to gain a seat on the company’s board.
No one is debating that change is badly needed at Motorola. In January the
company
reported
a steep drop in net income, to $624 million from $1.2 billion in the year ago
quarter, reflecting its practice of virtually dumping its Razr phones on the
market at razor low prices. And on the eve of its first quarter earnings report,
analysts are anticipating more bad news going forward.
But for all his criticism from the sidelines, Icahn has flip-flopped a bit. He
initially called for Motorola to focus on its soft stock price, but when
Motorola moved aggressively in that direction and increased its share repurchase
plan to $7.5 billion from $4.5 billion, Icahn attacked the company for not
addressing underlying operational problems. Those statements have led some
industry watcher to question whether Icahn knows enough about the cell phone
business to run Motorola more effectively than Zander.
Full coverage coming soon in The Daily Deal and on TheDeal.com.
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