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Will Top-Line Growth Buoy Motorola's (MSI) Q1 Earnings?

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Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report first-quarter 2021 results after the closing bell on May 6. In the last reported quarter, the company delivered an earnings surprise of 4.4%, surpassing the Zacks Consensus Estimate by 12 cents. In the first quarter, the company is likely to have generated higher consolidated revenues on a year-over-year basis due to healthy demand curve and solid order trends.

Factors at Play

During the first quarter, Motorola inked an agreement with Xcel Energy Inc. to deploy critical infrastructure solutions in Minneapolis for setting up a private wireless broadband network in the 900 MHz band. The wireless network, developed in collaboration with Anterix Inc., will enable the utility firm to promptly respond to local electric outages. In addition to a pro-active response, the network is likely to support the advanced features of ‘smart meters’ for better utilization of resources by providing customers key insights into their energy consumption patterns. Furthermore, it will provide cyber protection against potential cyber threats and sow the seeds for technology automation of utility services across remote locations.

Also, in the quarter, the company augmented the security capabilities of business enterprises by enriching its video security and analytics portfolio with the introduction of the Artificial Intelligence Network Video Recorder. This cloud-connected solution is likely to offer a comprehensive all-in-one cost-effective option for fulfilling the analytic, storage and cyber-security needs of enterprises. Such innovative product launches and system deployments are likely to have translated into incremental revenues for the Products & Systems Integration segment.

The Services and Software segment has been another area of significant focus. The company introduced additional services to its cybersecurity services portfolio in the quarter. The expansion is primarily aimed at safeguarding mission-critical operations of various public safety agencies and enterprises against malicious activities like data breaches. Motorola also collaborated with Canada’s third largest municipal police service — Peel Regional Police — to enhance the overall public safety ecosystem with centralized data access and render fast response times to mitigate operating risks. These are likely to be reflected in the upcoming results.

With healthy demand across land mobile radio products and other devices, driven by a comprehensive suite of services that ensures continuity and reduces risks related to critical communications operations, Motorola is likely to have recorded top-line expansion. The Zacks Consensus Estimate for total revenues for the first quarter is pegged at $1,750 million. In the year-earlier quarter, it generated revenues of $1,655 million. The consensus mark for earnings is currently pegged at $1.62 per share, indicating an improvement from $1.49 reported in the year-earlier quarter. During fourth-quarter 2020 earnings release, management projected first-quarter 2021 non-GAAP earnings in the $1.58-$1.64 per share range on year-over-year revenue growth of 5.5-6%.

Earnings Whispers

Our proven model does not predict an earnings beat for Motorola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.18%. 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. price-eps-surprise | Motorola Solutions, Inc. Quote

Zacks Rank: Motorola currently has a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Veru Inc. (VERU - Free Report) is set to release quarterly numbers on May 12. It has an Earnings ESP of +33.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Vroom, Inc. (VRM - Free Report) is +4.21% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on May 12.

The Earnings ESP for Apria, Inc. (APR - Free Report) is +4.55% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 13.

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