What’s Up With Motorola?

Motorola (NYSE: MOT) is enjoying a surprisingly bright outlook. This might be the start of a new era in Motorola’s long history — powered by Google’s Android phones.

Recent third-quarter earnings per share of 1 cent put Motorola in the black by the skin of its teeth — a huge improvement over the year-ago period’s $0.18 loss per share. Sales rolled in at $5.4 billion, some 27 percent lower than last year. Management is bullish about the future, though.

Verizon will be selling the handsome Motorola Droid handset, which might be Motorola’s first real hit since the early days of the RAZR phone. (The Motorola Cliq is offered by T-Mobile, but T-Mobile has a relatively small subscriber base.) The Droid features a camera with flash and a slide-out keyboard and has been generating some positive buzz.

Motorola would not have come close to positive earnings without an aggressive cost-savings program. The savings are running ahead of plan by $100 million this year for a total cost reduction of $1.9 billion. If those iPhone-challenging Droids hit the ground running with some traction, that low-cost operating model should pave the way for some nice, juicy earnings in coming quarters. That is, until Motorola spins out the handset division into a separate company. 