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Motorola Inc (NYSE:MOT) issues a very late Thursday press release (approximately 2000 ET) that they have missed their guidance. They also indicate that they will be issuing more complete information at 0630 the next day Friday followed by a conference call one hour later. They missed the guidance because of unfavorable product mix. This is a code word meaning the high margin stuff is not as popular as the spreadsheets need it to be. The stock roared up from approximately $19 in early July to $26 in early Oct before falling to a close of $20.55 on Thursday. Pre-market trading on Friday is down.

Motorola indicated “Quarterly mobile devices unit sales were about 66 million units, up 23 percent from the third quarter and 48 percent from the fourth quarter of 2005.” Most marketing departments would be delirious with huge volume results of this nature. Given Nokia’s strength any major improvement from Motorola should be welcome.

The marketing achievement turned guidance failure clearly indicates Motorola still does not have it figured out. Unfavorable geographic sales mix probably means currency exchange fluctuations. Global companies such as Motorola should be experienced in managing a specific risk of that nature. Product tier mix probably refers to more lower margin products being sold than forecast. Either the financial forecast was overly optimistic and or the production costs for the lower end are still not sufficiently competitive.

Everyone is dumping on Motorola. The company said “Both the networks & enterprise and the connected home segments are expected to meet or exceed internal expectations.” If they truly fix this problem the current herd negative thinking will be wrong. Hmmm Do not drop this call just yet!

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