The telecommunication company's results for the third quarter have beaten analysts' expectations, as it emerges from 'the most difficult period in history' for the industry

Motorola on Monday reported third-quarter revenue rose 5 percent and profit exceeded analyst expectations by 2 cents, thanks to an improving market for products such as cellular phones.

The company's net earnings for the quarter were $116m (£70m), or 5 cents per share. Revenue for the three-month period, which ended on 27 September, was $6.8bn. During the same period a year ago, Motorola reported earnings of $111m, or 5 cents per share, on revenue of $6.5bn.

Analysts had expected Motorola to earn a profit of 3 cents a share on revenue of $6.4bn, according to a survey by earnings tracking firm First Call.

Excluding a charge for special items that totalled $27m before taxes, Motorola would have posted net quarterly earnings of $132m, or 6 cents per share, the company said.

Motorola released its earnings statement a day ahead of schedule in an effort, it said, to offer investors "a more complete picture" of its finances, following a downgrading of its credit rating by Moody's Investors Service on Friday.

Sales in four of Motorola's six product categories increased year over year, the company said, adding that its third-quarter balance sheet was the strongest it has had in 20 years.

"More significantly, we grew," Christopher Galvin, Motorola's chief executive, said in a statement. "Sales increased by 5 percent and orders increased by 25 percent versus a year ago."

Revenue in the company's cellphone unit, for instance, was up 8 percent year over year to $2.9bn. Handset unit shipments were up 19 percent to 20.2 million, and the unit turned in a $147m profit. Also, the Global Telecom Solutions Segment saw sales increase by 2 percent to $1.1bn during the quarter. The telecom unit's orders were up 23 percent to $1.1bn and it posted a $61m profit for the quarter.

"Today's financial results are but a few of the indicators of positive momentum that are the result of three years of driving change across Motorola in the face of the most difficult period in history for the telecom and semiconductor industries," Galvin said in the statement.

But semiconductors continued to dog Motorola during the third quarter. The company's Semiconductor Products Segment saw its orders increase by 8 percent to $1.4bn during the quarter, but sales were down 4 percent to $1.2bn. The chip division posted a quarterly loss of $76m, including charges, versus a profit of $13m a year ago.

Motorola plans to spin off the chip unit later this year in an effort to refocus on other product lines and to encourage the chip unit to grow.

Looking ahead, the company forecast that its fourth-quarter revenue will come in between $7.5m and $7.8bn and that it will post a per-share profit of 8 cents to 12 cents, including charges. It did not outline in detail any charges that might come from spinning off the chip unit.

Motorola executives will convene a conference call this afternoon to discuss the earnings statement.

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