April 30 (Bloomberg) -- Motorola Inc., the biggest U.S. mobile-phone maker, posted a wider first-quarter loss as handset shipments fell by almost half. The stock declined 7.2 percent.

Revenue dropped 28 percent to $5.37 billion, slumping for a ninth straight quarter and missing the average analyst estimate of $5.62 billion in a Bloomberg survey. The loss widened to $231 million, or 13 cents a share, Motorola said in a statement.

Motorola has cut at least 7,000 jobs since October as Apple Inc. and Research In Motion Ltd. won over customers with more attractive devices and the recession hurt overall handset demand. The company boosted its cost-savings target for this year to $1.7 billion as it strives to return to profitability.

“The handset unit continues its nightmarish descent,” said Tero Kuittinen, an analyst at GC Research Capital Ltd. in New York, with an “underweight” rating on the stock.

Motorola, based in Schaumburg, Illinois, fell 43 cents to $5.53 at 4 p.m. in New York Stock Exchange composite trading. The stock has advanced 25 percent this year.

The net loss expanded from $194 million, or 9 cents, a year earlier. The loss, excluding severance and other costs, was 8 cents, compared with the average analyst estimate of 10 cents.

Shipment Slump

The loss this quarter, excluding some items, will be 3 cents to 5 cents a share, Motorola predicted. Analysts projected a loss of 4 cents. The company boosted its 2009 cost-savings target by $200 million and that may result in more job cuts, co- Chief Executive Officer Greg Brown said in a phone interview.

Motorola is looking “across the globe to drive further expense out of the business, and it’s possible it could involve some additional people,” Brown said.

The company, which said in February that it doesn’t expect to restore profitability this year, posted a 45 percent drop in mobile-phone revenue to $1.8 billion as it narrowed its range of devices. Phone shipments fell to 14.7 million. That compares with the 14 million estimate of Simona Jankowski, an analyst at Goldman Sachs Group Inc. in San Francisco.

Motorola remains committed to splitting off its phone unit, co-CEO Sanjay Jha said on a conference call. He wouldn’t give a time frame. Motorola announced the separation in March 2008 and delayed it in October, citing the recession. The phone unit’s loss will narrow “significantly” this quarter, Jha said.

HTC, Samsung Competition

Motorola’s other businesses, which are profitable, make TV set-top boxes, network equipment and two-way radios. Those businesses also posted revenue declines in the first quarter.

“The so-called stable divisions of Motorola have started looking a tad unstable,” Kuittinen said. “Motorola badly needs to keep these divisions solid and profitable” to compensate for the handset unit’s losses.

Motorola is betting on new Web and e-mail phones based on Google Inc.’s Android software, scheduled to be released in time for the year-end holidays. Motorola’s share of the handset market won’t improve until the Android phones makes their debut, Jankowski said.

The company plans to introduce Android phones with multiple carriers in North America and other regions, Jha said. A debut of the phone in China, which accounts for about 60 percent of Motorola’s sales in Asia, may be planned to coincide with the Chinese New Year in February 2010, he said.

HTC Corp. already makes an Android phone and Taipei-based Acer Inc. expects to release a device based on the software by the end of the year. Samsung Electronics Co., which eclipsed Motorola as the top seller of phones in the U.S. last year, is introducing an Android phone in June.

BlackBerry, IPhone

Motorola is trying to mimic the success of Apple’s iPhone and RIM’s BlackBerry, which appeal to consumers who want phones with Web browsers and media players. Carriers such as AT&T Inc. and Verizon Wireless favor such devices because their users of such phones usually spend more.

Sales growth of smart phones equipped with Web, e-mail and video functions will climb 3.4 percent this year as the overall mobile phone market shrinks for the first time since 2001, according to IDC. Last quarter, total mobile-phone shipments fell 16 percent, the Framingham, Massachusetts-based research firm said today.

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

Last Updated: April 30, 2009 16:04 EDT