It can't be fun to run Motorola (NYSE:MOT) right now. There's a fourth-quarter earnings report due on Tuesday, but it won't help much. The stock may look cheap, but please keep your hands off this value trap.

Recent history
The cell phone wrangler has laid off about 7,000 workers since late October, slashing payrolls by a full 25%. A sales decline that started way before last year's banking crisis plus high fixed costs add up to incredible shrinking margins (in the sideshow tent, right next to the Bearded Lady!), hit-and-miss earnings, and cash flows running near the breakeven point.

Yes, it's an industry-wide slump wrapped in economy-wide panic and then dipped in a worldwide lack of consumer spending. But more than that, Motorola is doing worse than all of its major rivals:


Market Cap (billions)

Trailing P/E Ratio

CAPS Rating

Cisco Systems (NASDAQ:CSCO)








Research In Motion (NASDAQ:RIMM)




Ericsson (NASDAQ:ERIC)








Data from Capital IQ, a division of Standard & Poor's.

You can't have a P/E ratio without trailing profits, and Motorola is the only wireless handset or infrastructure biggie without 'em. A once-impressive $55 billion market cap has dwindled to less than $11 billion in three short years, and market researchers say that its handset market share continues to drop. As if to pour pickle juice in those open wounds, even our CAPS community gives Motorola the worst rating of this bunch.

Looking for a miracle
It will take more than just some cost-cutting to turn this sinking ship around. Motorola is working on a Google (NASDAQ:GOOG) Android product line, and expects to release something in time for the 2009 holiday season. That won't help this week, as the company remains focused on Microsoft's (NASDAQ:MSFT) Windows Mobile platform.

There's also been talk of splitting Motorola into separate handset and mobile infrastructure companies, either spinning the phones out on their own or selling to the highest bidder. Again, that hasn't happened yet and won't affect this fourth quarter -- if it ever happens.

Long story short: Don't expect any manner of good news out of Motorola's report. It's more a question of how bad it'll be.

Stay far, far away from this stock, Fool. We still have no idea how far this knife will fall.

Further Foolishness:

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Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. He really is as Swedish as Ericsson, if not Swedisher. You can check out Anders' holdings or a concise bio if you like. The Motley Fool is investors writing for investors.