Motorola Handsets Still Hemorrhaging

logoUpdated: Oh no, Moto! The handset and equipment maker reported a $3.6 billion loss today on sales of $7.1 billion for the fourth quarter of 2008.  Motorola’s (s MOT) handset business sold only 19.2 million phones, in line with expectations. With a quarterly loss of $595 million, Moto’s handset business has lost a collective $3.22 billion in the last two years. All other business units at the company reported earnings increases, among them network equipment, set-top boxes and RFID systems.

As part of the financial results, Moto said will suspend its dividend, and that CFO Paul Liska has left after less than a year. Corporate Controller Edward J. Fitzpatrick will take his place while a new CFO is found.

The handset business is dragging down the company, and there’s no end in sight. Motorola can’t sell it, and turning the business around in the current economic climate is, as Om puts it, “like climbing Mount Everest without a tank of oxygen.” There are some indications that Motorola may be giving up, as it lays off more handset employees, and hints at dumping operating systems. Update: Motorola Co-CEO Sanjay Jha said today on the results call that Motorola will focus for now on Google’s (s GOOG) Android platform, because “it’s more competitive” than Windows Mobile. Maybe Moto should talk to Dell (s DELL). I hear Michael is interested in handsets and some people there are pretty familiar with the Moto business. Wow, that would be a culture clash!