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Motorola (MSI) to Post Q3 Earnings: What's in the Offing?
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Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report third-quarter 2018 results after the closing bell on Nov 1. In the last reported quarter, the company delivered a positive earnings surprise of 6.6%. Notably, Motorola has surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters with an average beat of 11.8%.
In the third quarter, the company is likely to report higher consolidated revenues on a year-over-year basis supported by healthy growth trajectory in both the segments. Whether this could result in an earnings beat remains to be seen.
Factors to Consider
Motorola’s Services and Software segment has been an area of significant focus. The company has expanded its services installed base and is building an end-to-end public safety command center platform. Management expects the segment to grow at a faster rate than Products and Systems Integration segment, and to drive meaningful operating margin expansion in 2019 and beyond. The company’s Services and Software primarily comprises recurring revenues, including Managed & Support Services, public safety and enterprise command center software, video software and unified communications applications.
Motorola expects to strengthen its leading position in the public safety domain by collaborating with other players in the ecosystem. As the public safety market continues to embrace software offerings to enhance workflows, Motorola is able to sell cloud-first SaaS offerings in addition to on-premise solutions with ancillary implementation and managed services. The company continues to expand its software offerings to provide solutions across the various segments of the public safety workflow. The Services and Software segment is likely to record revenues of $711 million in the third quarter, up from $656 million recorded in the year-earlier quarter.
The Products & Systems Integration segment comprises a wide portfolio of infrastructure, devices and accessories along with systems integration. As the leading provider of mission-critical communication products and services for government and commercial customers alike, Motorola has a steady revenue stream from this niche market. In an effort to further expand its public safety measures, the company has launched new broadband service, high power mobile radio and mobile app solutions, dedicated to public security.
Motorola is poised to gain from robust organic growth, disciplined capital deployment and a favorable growth dynamics. The Products & Systems Integration segment is likely to record revenues of $1,023 million in the third quarter, up from $989 million recorded in the year-ago quarter.
With solid organic growth driven by continued strength in demand curve, Motorola is likely to record healthy top-line growth. The Zacks Consensus Estimate for total revenues for the quarter is pegged at $1,863 million. In the year-earlier quarter it generated revenues of $1,645 million.
Earnings Whispers
Our proven model does not conclusively show that Motorola is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and Zacks Consensus Estimate, is 0.00% with both pegged at $1.72. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Motorola has a Zacks Rank #3. While this increases the predictive power of ESP, we need to have a positive ESP to make us reasonably confident of an earnings beat.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Windstream Holdings, Inc. is slated to release quarterly numbers on Nov 8. It has an Earnings ESP of +10.79% and a Zacks Rank #3.
The Earnings ESP for CenturyLink, Inc. is +10.29% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov 8.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Motorola (MSI) to Post Q3 Earnings: What's in the Offing?
Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report third-quarter 2018 results after the closing bell on Nov 1. In the last reported quarter, the company delivered a positive earnings surprise of 6.6%. Notably, Motorola has surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters with an average beat of 11.8%.
In the third quarter, the company is likely to report higher consolidated revenues on a year-over-year basis supported by healthy growth trajectory in both the segments. Whether this could result in an earnings beat remains to be seen.
Factors to Consider
Motorola’s Services and Software segment has been an area of significant focus. The company has expanded its services installed base and is building an end-to-end public safety command center platform. Management expects the segment to grow at a faster rate than Products and Systems Integration segment, and to drive meaningful operating margin expansion in 2019 and beyond. The company’s Services and Software primarily comprises recurring revenues, including Managed & Support Services, public safety and enterprise command center software, video software and unified communications applications.
Motorola expects to strengthen its leading position in the public safety domain by collaborating with other players in the ecosystem. As the public safety market continues to embrace software offerings to enhance workflows, Motorola is able to sell cloud-first SaaS offerings in addition to on-premise solutions with ancillary implementation and managed services. The company continues to expand its software offerings to provide solutions across the various segments of the public safety workflow. The Services and Software segment is likely to record revenues of $711 million in the third quarter, up from $656 million recorded in the year-earlier quarter.
The Products & Systems Integration segment comprises a wide portfolio of infrastructure, devices and accessories along with systems integration. As the leading provider of mission-critical communication products and services for government and commercial customers alike, Motorola has a steady revenue stream from this niche market. In an effort to further expand its public safety measures, the company has launched new broadband service, high power mobile radio and mobile app solutions, dedicated to public security.
Motorola is poised to gain from robust organic growth, disciplined capital deployment and a favorable growth dynamics. The Products & Systems Integration segment is likely to record revenues of $1,023 million in the third quarter, up from $989 million recorded in the year-ago quarter.
With solid organic growth driven by continued strength in demand curve, Motorola is likely to record healthy top-line growth. The Zacks Consensus Estimate for total revenues for the quarter is pegged at $1,863 million. In the year-earlier quarter it generated revenues of $1,645 million.
Earnings Whispers
Our proven model does not conclusively show that Motorola is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and Zacks Consensus Estimate, is 0.00% with both pegged at $1.72. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Motorola Solutions, Inc. Price and EPS Surprise
Motorola Solutions, Inc. Price and EPS Surprise | Motorola Solutions, Inc. Quote
Zacks Rank: Motorola has a Zacks Rank #3. While this increases the predictive power of ESP, we need to have a positive ESP to make us reasonably confident of an earnings beat.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Windstream Holdings, Inc. is slated to release quarterly numbers on Nov 8. It has an Earnings ESP of +10.79% and a Zacks Rank #3.
United States Cellular Corporation (USM - Free Report) is likely to release results on Nov 2. The company has an Earnings ESP of +57.45% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for CenturyLink, Inc. is +10.29% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov 8.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>