Motorola mulls mobile unit spinoff

NEW YORK (CNNMoney.com) -- Motorola said Thursday it is considering spinning off its troubled mobile phone unit.

A separation is just one option, the communications device maker said, as it looks at a possible restructuring to make it more competitive.

When Motorola reported fourth-quarter earnings last week, chief executive Greg Brown said its mobile devices division remained challenged, and that it could be 2009 before Motorola's portfolio became "robust and competitive."

A repositioning of the mobile devices unit would "accelerate its recovery and retain and attract talent," Brown said in a statement Thursday.

Motorola was hit hard last quarter as profits plunged to $111 million from $523 million the year before, and cell phone sales dropped 38%.

The company's mobile phone division "has become subscale, which will have significant cost disadvantage in [the] long term," Ping Zhao, a senior analyst with CreditSights wrote in an email.

Without its mobile handset division, she said, the company will be "much more stable," but it could have a lower growth rate.

Motorola said it wouldn't comment on specific actions until its board of directors approves a definitive plan.

Motorola (MOT, Fortune 500) shares rose more than 10% to $12.27 in after-hours trading.