On Tuesday, Motorola Inc. posted a massive fourth-quarter loss as it recorded charges to reflect the dwindling value of its cell phone business.
The telecommunication equipment maker also announced the resignation of its chief financial officer as well the suspension of its dividend.
In the fourth quarter, Motorola lost $3.6 billion, or $1.57 per share, in the fourth quarter.
Its stock tumbled 50 cents or 11 percent to $4.04 by mid-day trading.
Motorola's sales in the fourth quarter were $7.14 billion, down 26 percent from the year-ago period.
In the same quarter of 2007, Motorola earned $100 million, or 5 cents per share.
Motorola gave no reason for the departure of CFO Paul Liska, who was appointed last February. Edward J. Fitzpatrick, senior vice president and corporate controller, will be acting CFO while the company searches for a permanent replacement.
Liska was unable to be reached for comment.
Motorola is on a mission to cut costs by $1.5 billion this year, mainly from the cell phone division. It announced 4,000 job cuts in January, in addition to 3,000 it announced in October.
Even with those efforts, Motorola forecasts a loss of 10 cents to 12 cents per share for the current quarter, excluding charges. Analysts had expected a loss of 6 cents per share.
Motorola paid a dividend of 5 cent in the third quarter. Last year $453 million in dividends were paid out. The suspension of the fourth quarter dividend shows the company's need to conserve cash.
Motorola sold 19.2 million cell phones worth $2.35 billion in the quarter; less than half the number of units it sold in the fourth quarter of 2007, Motorola had however warned of the decline in January.
The cell phone unit is struggling both with a loss of market share and a decline in the overall market, as the economic malaise weakens consumer appetites.
In order to stay in line with its competitors; Motorola is aiming to produce hit smart phones, taking up the challenge of matching Apple Inc.'s iPhone and Research in Motion Ltd.'s BlackBerrys. It will focus on using Google Inc.'s Android software, letting Microsoft Corp.'s Windows Mobile take a back seat, at least until the new version of Windows arrives next year.
For all of 2008, Motorola lost $4.16 billion, or $1.84 per share. In the previous year it had lost $49 million, or 5 cents per share.
Sales in 2008 were $30.1 billion, down 18 percent from the year before.