We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Motorola (MSI) Earnings and Revenues Beat Estimates in Q2
Read MoreHide Full Article
Motorola Solutions Inc.’s (MSI - Free Report) second-quarter 2016 earnings per share (including stock-based compensation expense) of $1.03 per share comfortably beat the Zacks Consensus Estimate of 90 cents. Also, earnings improved 66.1% from the year-ago figure, thanks to a significant reduction in costs and increase in sales.
Revenues in the quarter increased 5% from the year-ago quarter to $1,430 million and beat the Zacks Consensus Estimate of $1,395 million. The top line was impacted by foreign currency movements to the tune of $22 million. Operating margin (on an adjusted basis) came in at 22.7% in the quarter, compared with 19% a year ago due to increase in sales and lower operating expenses.
Operating Results
Product segment revenues came in at $801 million in the second quarter, down 8% year over year. Services revenues totaled $629 million, up 26% year over year. The inclusion of products of the recently acquired Airwave Solutions apart from 4% organic growth witnessed in Managed & Support services led to the upside. However, revenues declined 4% in the segment, excluding Airwave Solutions, owing to low systems integration from a large European project.
An increase of $2.2 billion was observed in backlog compared to the prior-year quarter, taking the total to $8.2 billion. Airwave Solutions contributed $1.6 billion to backlog while organic managed and services added another $600 million approximately. From the prior year quarter, products backlog was $64 million.
Motorola generated $292 million of cash from operations in second-quarter 2016 compared with $149 million in the comparable prior year quarter. At the end of the quarter under review, Motorola had $1,545 million in cash and cash equivalents, compared with $1,980 million at the end of 2015. Long-term debt, at the end of the quarter, was $5,028 million compared with $4,345 million at the end of 2015.
Share Repurchase and Dividends
The company returned approximately $555 million to shareholders through buybacks and $72 million in dividends in the second quarter of 2016.
The company has also received approval for a new $2 billion share repurchase program from its board of directors which takes the total authorization to $14 billion from Jul 2011.
Outlook
Motorola expects revenues in the third quarter of 2016 to improve in the range of 6% to 7% on a year-over-year basis. The Airwave Solutions buyout is expected to boost third-quarter revenues by about $130 million. Adjusted earnings per share in the third quarter are projected in the band of $1.17 to $1.22. The Zacks Consensus Estimate of $1.13 is below the guided range.
For 2016, the top line is still projected to grow in the band of 5% to 7% Earnings per share (on an adjusted basis) in 2016 are still expected in the range of $4.45 to $4.65. The Zacks Consensus Estimate of $4.26 lies below the guidance.
Motorola currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Clearfield, Inc (CLFD - Free Report) , QUALCOMM Inc. (QCOM - Free Report) and Sonus Networks, Inc . All the companies carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Motorola (MSI) Earnings and Revenues Beat Estimates in Q2
Motorola Solutions Inc.’s (MSI - Free Report) second-quarter 2016 earnings per share (including stock-based compensation expense) of $1.03 per share comfortably beat the Zacks Consensus Estimate of 90 cents. Also, earnings improved 66.1% from the year-ago figure, thanks to a significant reduction in costs and increase in sales.
Revenues in the quarter increased 5% from the year-ago quarter to $1,430 million and beat the Zacks Consensus Estimate of $1,395 million. The top line was impacted by foreign currency movements to the tune of $22 million. Operating margin (on an adjusted basis) came in at 22.7% in the quarter, compared with 19% a year ago due to increase in sales and lower operating expenses.
Operating Results
Product segment revenues came in at $801 million in the second quarter, down 8% year over year. Services revenues totaled $629 million, up 26% year over year. The inclusion of products of the recently acquired Airwave Solutions apart from 4% organic growth witnessed in Managed & Support services led to the upside. However, revenues declined 4% in the segment, excluding Airwave Solutions, owing to low systems integration from a large European project.
An increase of $2.2 billion was observed in backlog compared to the prior-year quarter, taking the total to $8.2 billion. Airwave Solutions contributed $1.6 billion to backlog while organic managed and services added another $600 million approximately. From the prior year quarter, products backlog was $64 million.
Motorola generated $292 million of cash from operations in second-quarter 2016 compared with $149 million in the comparable prior year quarter. At the end of the quarter under review, Motorola had $1,545 million in cash and cash equivalents, compared with $1,980 million at the end of 2015. Long-term debt, at the end of the quarter, was $5,028 million compared with $4,345 million at the end of 2015.
Share Repurchase and Dividends
The company returned approximately $555 million to shareholders through buybacks and $72 million in dividends in the second quarter of 2016.
The company has also received approval for a new $2 billion share repurchase program from its board of directors which takes the total authorization to $14 billion from Jul 2011.
Outlook
Motorola expects revenues in the third quarter of 2016 to improve in the range of 6% to 7% on a year-over-year basis. The Airwave Solutions buyout is expected to boost third-quarter revenues by about $130 million. Adjusted earnings per share in the third quarter are projected in the band of $1.17 to $1.22. The Zacks Consensus Estimate of $1.13 is below the guided range.
For 2016, the top line is still projected to grow in the band of 5% to 7% Earnings per share (on an adjusted basis) in 2016 are still expected in the range of $4.45 to $4.65. The Zacks Consensus Estimate of $4.26 lies below the guidance.
MOTOROLA SOLUTN Price, Consensus and EPS Surprise
MOTOROLA SOLUTN Price, Consensus and EPS Surprise | MOTOROLA SOLUTN Quote
Zacks Rank & Key Picks
Motorola currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Clearfield, Inc (CLFD - Free Report) , QUALCOMM Inc. (QCOM - Free Report) and Sonus Networks, Inc . All the companies carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>