Motorola Inc. (MOT) swung to a third-quarter profit ahead of the debut of two key new smartphones aimed at turning around its momentum.

The Schaumburg, Ill., company also made official veteran executive Edward Fitzpatrick's role as chief financial officer, which he filled on an interim basis since February. He has been with Motorola since 2000.

The troubled handset maker has struggled with crafting a desirable handset, but that appears to be changing after it unveiled the Cliq for T-Mobile USA and the Droid for Verizon Wireless. Neither device, however, is yet available, and Wall Street has largely given the company a pass, preferring to wait and use their success as a more accurate gauge of future performance.

"Motorola will get a waiver from investors as long as it shows directional improvements in its financial model," said RBC Capital analyst Mark Sue.

For the period, Motorola posted a profit of $12 million, or 1 cent a share, versus a year-earlier loss of $397 million, or 18 cents, based largely on an aggressive series of cost cuts. The results include 1 cent a share in charges related to environment costs and its ongoing effort to separate the cellphone business.

Revenue, meanwhile, fell 28% to $5.45 billion, largely due to plunging sales of its handset business.

Analysts, on average, expected a break-even quarter, at the mid-point of the company's forecast, as well as revenue of $5.54 billion.

Motorola shares rose 5.3% to $8.38 in pre-market trading. They have more than doubled since hitting a 52-week low in March.

Motorola still plans to split the company, separating the handset business from the networks and equipment unit, which consists of areas such as network gear, public safety radios and set-top boxes. The plan was delayed due to the tough economic and credit environment and the desire to strengthen the embattled cellphone business.

The wireless segment's sales fell 46% to $1.7 billion as the company's position further eroded to 4.7% of the global market. In the second quarter, its share was at 5.5%.

Investors are hopeful of a turnaround. Verizon Wireless, which is jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group Plc (VOD), is already heavily promoting its Droid phone, which was unveiled Wednesday. Deutsche Telekom AG's (DT) T-Mobile USA is also expected heavily push the Cliq. In the mean time, the company has relied on low-profile and basic handsets to fill the gap.

But the smart phone business continues to be tough for new entrants or companies looking for a comeback. Palm Inc. (PALM), which launched its heavily hyped Pre in June, continues to struggle. Dominating the market is the Apple Inc. (AAPL) iPhone and Research in Motion Ltd.'s (RIMM) Blackberry line.

Motorola is banking that its use of Google Inc.'s (GOOG) Android software will give it an edge. It also doesn't hurt that it has the support of the nation's largest carrier by subscriber.

"More Droids and more carrier backing will be required for Motorola to perform next year," Sue said. "Cost cutting will only get you to a point so we look for Motorola to continue to sharpen its execution focus."

The home and networks business saw sales fall 27% to $2 billion.

The enterprise mobility unit posted a milder decline of 17% to $1.7 billion. The unit over the past few years has carried the company's results, but have felt the pressure as governments, businesses and carriers have cut back on spending.

Motorola expects fourth-quarter earnings from continuing operations of 7 cents to 9 cents a share. The estimate excludes charges related to its cost cuts. Wall Street is looking for earnings of 6 cents a share for the period.

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com

Order free Annual Report for Deutsche Telekom AG

Visit http://djnewswires.ar.wilink.com/?link=DT or call 1-888-301-0513