Slowing phones sales have hit Motorola, which Thursday reported a first-quarter net loss of $194 million, compared to a $181 million loss for the same quarter last year.

The company reported sales of $7.45 billion, compared to $9.43 billion during the same period last year. The loss per share amounted to $0.09, compared to a loss per share of $0.08 last year. Analysts had expected Motorola to post a loss of $0.07 per share, and generate sales of $7.75 billion.

The problem child for Motorola is, and has been for some time, the mobile phone business. It sold 27.4 million phones during the first quarter, compared to 45.4 million a year ago. The drop in mobile-device sales, in dollar terms, compared to the first quarter of last year was 39 per cent. Nokia - the market leader - sold 115.5 million phones during the first three months.

"It's another bad quarter for Motorola. The impact of their portfolio issues are now affecting them in North America as well, where they were still the market leader in the last quarter of 2007," said Carolina Milanesi, research director at Gartner.

With all that in mind, it doesn't come as a surprise that Motorola prefers to look forward. CEO Greg Brown highlighted the company's plan to split into two separate companies, and vowed to improve its mobile phone portfolio, in a statement.

But turning things around won't be that easy, according to Milanesi.

"The decision to create two separate companies does not solve the issues, and might have created some more uncertainty. Motorola needs to move quickly to revamp its portfolio, and also give more confidence to operators of what there is to come," she said.

Meanwhile, Motorola's Enterprise Mobility Solutions segment reported sales at $1.8 billion, up 5 per cent compared to last year. Earnings increased to $250 million, compared to $131 million during the first quarter last year.

Sales for the Home and Networks Mobility were $2.4 billion, up 2 per cent compared to a year ago. Earnings were down, $153 million compared to $167 million.