Oct. 30 (Bloomberg) -- Motorola Inc., the world's third- largest maker of mobile phones, posted third-quarter earnings that beat analysts' estimates after cutting more than 9,000 jobs in two years to make up for slumping sales.

The company delayed a plan to split of its handset division by the third quarter of 2009, citing the financial crisis and slowing economy. The company said in March it plans to separate the unit to focus on profitable TV set-top boxes, two-way radios and wireless-networking gear.

Motorola said it will exceed its goal of cutting $1 billion in expenses this year. Co-Chief Executive Officers Greg Brown and Sanjay Jha, who was hired in August to revive the phone unit, are overhauling the company to win back sales lost to Nokia Oyj and Samsung Electronics Co. Handset sales fell 32 percent to 25.4 million units, the seventh straight drop.

``The bottom line was better'' as the cost cuts are having an effect, said Matthew Thornton, a Boston-based analyst at Avian Securities LLC. He rates the stock ``neutral.''

Profit, excluding costs from job cuts, was 5 cents a share, Motorola said today in a statement. That exceeded the 2 cents analysts in a Bloomberg survey projected. The company said it plans to reduce costs by $800 million next year.

Profit this quarter will be 2 cents to 4 cents a share, excluding costs for job cuts, Motorola said. That missed the 7- cent average analyst estimate.

Motorola, based in Schaumburg, Illinois, rose 39 cents, or 7.1 percent, to $5.85 in early trading. The stock closed at $5.46 on the New York Stock Exchange yesterday. It had lost 66 percent this year before today.

Slowing Handset Demand

The third-quarter net loss was $397 million, or 18 cents a share, compared with a profit of $60 million, or 3 cents, a year earlier. Sales fell 15 percent to $7.48 billion, missing the $7.82 billion average analyst estimate.

Jha, 45, is tasked with reviving a business that hasn't had a hit since the all-metal Razr flip phone, introduced in 2004. Once the industry leader, Motorola now competes against South Korea's LG Electronics Inc. to hold on to its No. 3 ranking.

Revenue from mobile phones fell 31 percent to $3.12 billion last quarter, and the unit was the company's only money-losing business with a loss of $840 million. That widened from $248 million a year earlier.

Touch Screens

Motorola's share of the global market declined to 10 percent in the second quarter from 14.5 percent a year earlier, according to researcher Gartner Inc. Nokia, based in Espoo, Finland, led with 39.5 percent, followed by Samsung at 15.2 percent. LG, which had 8.8 percent of the market in the second quarter, said last week it sold 23 million devices in the most recent period.

Jha, who spent 14 years at San Diego-based Qualcomm, plans to sell more expensive devices with full keyboards and touch screens to boost profit. Motorola, whose older W755 phone sells for $19.99, this month unveiled the $149.99 Krave, which has a clear flip cover and a full touch screen inside. The Krave is Motorola's first touch-screen model in the U.S., challenging Apple Inc.'s iPhone.

Two weeks ago, Gartner cut its global mobile-phone sales forecast because consumers are reducing purchases and signing up for longer contracts. Unit sales will rise 8 percent this year, down from a July projection of 10 percent to 11 percent, according to Stamford, Connecticut-based Gartner. Last year, sales rose 16 percent to 1.15 billion phones.

To contact the reporters on this story: Amy Thomson in New York at athomson6@bloomberg.net; Vivek Shankar in San Francisco at vshankar3@bloomberg.net

Last Updated: October 30, 2008 08:35 EDT