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Shares Jump as Motorola Names co-CEO


Shares of Motorola leaped $.91, or 10.3 percent, to $9.72 in late morning trading Monday after the former Qualcomm executive Sanjay Jha was named co-chief executive and leader of the mobile device business scheduled to be spun off in the third quarter of 2009.

Analysts cited Mr. Jha’s record at Qualcomm as a positive development for Motorola, which has struggled to keep pace against Nokia, Samsung, LG, newcomer Apple and others in the competitive mobile handset business.

“We believe Mr. Jha has a proven operating execution history and see this as positive for Motorola,” UBS analyst Maynard Um said in a research note. “We continue to believe turning the tides for Motorola will take time and new product portfolios (still a tough road ahead). But investors may have more confidence in the probability of turning the business around.”

Greg Brown shifts from chief executive of the entire company to co-CEO in charge of the company’s broadband network unit. Mr. Jha had been chief operating officer at Qualcomm, a supplier of semiconductors for wireless handsets that use the CDMA (code division multiple access) standard.

Last week, Motorola posted a second-quarter profit of $4 million versus a loss of $28 million in the prior year’s quarter as a wider loss at the cell phone unit was offset by cost-cutting and gains in the broadband business.

 Revenue was $8.08 billion, a decline from $8.73 billion in the 2007 quarter. Per share income was break even. Both revenue and net income exceeded the consensus forecasts for Wall Street analysts.

In a conference call Monday Mr. Jha said he planned to hit the ground running, making changes in the business within 90 days.

He cautioned, however, that those moves will take time to percolate through Motorola’s business.

The changes, he said “are most likely to have an impact in the second half of 2009.”

In last week’s earnings call, Mr. Brown said that separating the mobile phone unit is a necessity given the speed at which that business moves.

“It's faster. It's more software oriented. It's more full and rich experience-driven,” he said. “I think that a focused management team as well as recruiting a world-class CEO, which I think is increased from a recruiting standpoint, getting a world-class CEO at the prospect of running their own public independent company lends itself well to compete more effectively, to drive with greater speed and agility and also have a capital structure and an investment base that's more reflective of the markets that they serve.”