Motorola rises as CEO says he will leave |
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Fri, 30 Nov 2007 18:15
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NEW YORK (AP) - Shares of Motorola Inc. rose Friday after the troubled cell phone maker said its chief executive, Ed Zander, will be replaced in January by President and Chief Operating Officer Greg Brown.Motorola shares rose 12 cents to $15.77 in morning trading.After experiencing success with the company's first RAZR cell phone -- which was released in 2004 -- Motorola started hurting last year, when sales slowed and the company acknowledged it had been trading profit margins for global market share by undercutting pricing.The company has also slipped to third place in the cell phone market, coming in behind Samsung Electronics Corp. and leader Nokia Corp.In a Friday client note, Citi Investment Research analyst Jim Suva said the change was a positive one, though he said Zander's departure makes him think Motorola's handset unit continues to struggle.Suva is cautious about the company's fourth-quarter prospects, saying 'field work suggests fourth-quarter is not above plan' and December performance will be key to the period.Suva rates Motorola shares 'Hold' with a $22.50 price target.CIBC World Markets analyst Ittai Kidron also reacted positively to the change in a Friday note to clients and said he doesn't expect 'drastic change' in Motorola's culture.Yet Kidron highlighted Brown's mergers and acquisitions experience, predicting that 'the possibility of a breakup could be one that comes to light over the next six months.'The analyst rates the stock 'Sector Outperform' with a $21 price target.(This version CORRECTS the headline to 'CEO says he will leave.')Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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