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Motorola said fourth-quarter profit was $100 million, or 4 cents per share, compared with $623 million, or 25 cents a share, a year earlier. Revenue fell 18 percent to $9.65 billion. The company’s income came to just $968 million in the third quarter, or $0.39/share, compared to $1.75 billion in the same period last year. The division posted an operating loss of $388 million in the fourth quarter, compared with a profit of $341 million a year ago. Mobile phone sales fell 38 percent to $4.8 billion, with 40.9 million units sold.

Avian Securities analyst Tero Kuittinen said the outlook reflected Motorola’s lack of a strong enough product line to beat rivals, such as Nokia and Samsung Electronics, to which Motorola has been losing market share. Motorola shares have fallen about 53 percent since October 2006. Motorola is blaming a slowdown in European GSM infrastructure sales, along with declining revenue from iDEN phones on the Sprint Nextel network, for a sharp decline in its third-quarter profits.

The company has sold more than 8 million Razrs, 3 million Krzrs, and 1.5 million Razr2s. But it struggled in sales of low-end phones; high-end, multifeature smartphones; and third-generation phones that download data at high speeds. The weakness was especially acute in places such as Europe and emerging markets. And Motorola is now progressing on a number of fronts. New products such as the Rokr E8 and Moto Z10 will help to fill gaps in music and video capabilities, respectively. User interfaces are being upgraded and 3G technology expanded.

Greg Brown, Chief Executive Officer, became CEO on January 1 and faces criticism of Motorola’s phone line up and its lack of a popular successor to the once-lauded Razr phone. Brown told analysts that the company would take cost-cutting actions that would create savings of $500 million. “The recovery in Mobile Devices will take longer than expected and there is a lot more work to be done” as told by Chief Executive Officer Greg Brown

Now Motorola plans to focus on cutting costs and getting mobile devices back to profitability. Management has restructured the business, cutting 7,500 jobs and seeking to reduce costs and boost margins as the division had an operating loss of $388 million and shipped just under 41 million devices.