WASHINGTON (MarketWatch) -- Motorola Inc. on Thursday reported sharply higher second-quarter net income, helped by the sale of more profitable smartphones and other communications equipment.

Schaumburg, Ill.-based Motorola (MOT) shipped 8.3 million handsets -- better than expected -- including the Droid, sold by Verizon Wireless. Motorola and Verizon have positioned the Droid as a competitor to Apple Inc.'s (AAPL) iPhone.

Motorola has been revamping its handset business to focus on a smaller range of smartphone devices that command better pricing than feature phones. The company sold 2.7 million smartphones in the second quarter.

The company's latest results highlight Motorola's ongoing effort to revive its mobile-device business, once the biggest in the world. The vendor is expected to benefit in the current quarter from the launch of its latest smartphone, the Droid X.

In a conference call with analysts, Motorola co-CEO Sanjay Jha -- who leads the handset business -- said sales of the Droid X are "exceeding our expectations."

Shares of Motorola were up nearly 1% to $7.75 by late Thursday afternoon. The stock has jumped more than 20% this month -- mostly on anticipation of the Droid X launch.

Better handset sales are critical for Motorola, which plans to split into two parts next year - mobile devices and enterprise mobility. The devices segment focuses on phones and other consumer devices while the enterprise division sells communications equipment to business and government.

Earlier this month, Motorola also agreed to sell to Nokia Siemens Networks the division that makes wireless-network equipment for phone companies. The deal will fetch $1.2 billion in cash.

Quarterly results

In the quarter ended June 30, Motorola said it earned $162 million, or 7 cents a share, compared with $26 million, or 1 cent a share, in the year-earlier period. Revenue dipped 1.5% to $5.41 billion.

Adjusted for one-time costs, Motorola would have earned 9 cents a share. The company was expected to earn 8 cents a share on $5.2 billion in sales, according to consensus forecasts from FactSet Research.

For the third quarter, Motorola predicted it would earn 10 cents to 12 cents a share, adjusted for one-time items. Wall Street had been forecasting earnings of 8 cents a share.

Revenue in Motorola's mobile-devices division fell 6% to $1.7 billion from a year earlier. Yet the company reduced its adjusted operating loss to $109 million from $239 million in the year-earlier quarter.

Jha maintained that he expects the mobile business to become profitable on an operating basis in the fourth quarter.

Returning the phone business to profitability would represent a major milestone for Jha, who joined the company just two years ago. He's cut costs, narrowed the development and manufacturing process and forged vital alliances with Google Inc. (GOOG) and Verizon Wireless.

Almost all of Motorola's new phones, for example, employ Google's easy-to-use software and the company's top phones are sold through Verizon, the largest mobile operator in the U.S.

"That's a huge achievement," said longtime mobile analyst Tero Kuittinen of MKM Partners LLC. "It's certainly difficult to please Verizon."

Verizon is the exclusive seller of the Droid X, the hot-selling sequel to the Droid. The Droid X was greeted with enthusiastic crowds and sold-out stores when it hit the market on July 15. The enthusiasm has also benefited Motorola's stock, which has surged by more than 20% this month.

The enterprise mobility unit, meanwhile, recorded a 10% increase in sales to $1.9 billion. Adjusted operating income rose to $292 million from $225 million a year earlier.

Sales in the networking division slipped 2% to $967 million, but operating income adjusted for one-time items rose to $191 million from $147 million a year earlier.

Nokia Siemens aims to close its purchase of the network assets by the end of the year.