Motorola, the struggling handset manufacturer, told investors that there would be no imminent end to its woes, saying that the turnaround of its poorly performing devices division would take longer than expected.

In a statement this morning, the company said that it expected to make a loss in the current quarter, adding that 2008 would be a challenging year.

Shares in Motorola dropped by nearly 16 per cent — to $10.39 — before the bell as the company announced that it expected a loss of 5 cents to 7 cents a share in the first quarter from continuining operations separate from any costs associated with restructuring.

Analysts were expecting earnings of 9 cents a share for the current quarter, excluding items, according to Reuters Estimates.

“We are focused on aggressively rationalising the company’s cost structure and working to get mobile devices back on track,” Greg Brown, the Motorola chief executive, said.

"The recovery in Mobile Devices will take longer than expected and there is a lot more work to be done."

He added that the company would save $500 million (£257 million) through a range of cost-cutting measures.

Motorola, which has struggled amid tough competition from Nokia, RIM and, more recently, Apple, said that its fourth-quarter profit had dropped by 84 per cent to $100 million — or 4 cents a share — in comparison with $623 million — or 25 cents a share — a year earlier.

Revenue fell from $11.8 billion to $9.65 billion.

The company has come under fierce criticism from investors for failing to come up with more innovative devices in the wake of its hugely popular Razr phone.

Ed Zander, its long-standing chief executive, stepped down last month.

Shares in Motorola have fallen by nearly 50 per cent since October last year.

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