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Will Modest Top-Line Growth Aid Motorola (MSI) Q2 Earnings?
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Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report second-quarter 2022 results on Aug 4, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.6%. It pulled off a trailing four-quarter earnings surprise of 7.4%, on average.
The Chicago, IL-based company is expected to have recorded year-over-year higher revenues on the back of growth in both segments — Products and Systems Integration, and Services and Software. It benefits from the increasing demand for its mission-critical technologies in North America and globally.
Factors at Play
During the quarter, Motorola secured a contract to provide Swisscom with an advanced 3GPP standards-compliant push-to-talk (PTT) solution. The PTT service connects individuals and groups instantaneously over Swisscom’s broadband network and allows it to offer priority usage to critical users in emergency situations. It also secured a prime contract for an undisclosed amount from National Highways to provide VB400 body-worn cameras for the safety and security of employees and passengers across the strategic road network of England. With road journeys gradually picking up pace, the contract will offer the requisite wherewithal to the government firm that operates and maintains 4,300 miles of motorway and major roads in England 24/7 to ensure safer and smoother drives.
In the second quarter, Motorola inked a contract with Taiwan National Police Agency to strengthen the public-safety communications system. Per the deal, it will enable advanced digitally encrypted radio communications based on the P25 standard for a secure and resilient private communications system to support public safety. Motorola deployed the TETRA (Terrestrial Trunked Radio) communication system in the Kansai International Airport in Japan in a major boost to the South East Asian country’s tourism and aviation sector. It has also deployed several two-way radios across these airport facilities for seamless communications with air traffic control, runway management, security, ground staff, bus transit services and commercial airlines.
Riding on such state-of-the-art products, Motorola expects to record strong demand across video security and services, land mobile radio products and related software while benefiting from a solid foundation. These systems drive the demand for additional device sales and promote software upgrades and infrastructure expansion. The comprehensive suite of services ensures continuity and reduces risks related to critical communications operations. These developments are expected to have positively impacted its performance in the quarter.
The Zacks Consensus Estimate for the Products and Systems Integration segment’s revenues is pegged at $1,220 million. The figure indicates a rise from $1,198 million recorded in the year-ago quarter.
During the quarter, Motorola announced that its Pronto solution is being utilized by the frontline personnel within Surrey Police and Sussex Police forces to gain immediate access to the comprehensive international criminal database of the INTERPOL. The Pronto digital policing application software simplifies and streamlines disparate business processes from time-consuming, paper-based and resource-intensive systems into an efficient, effective, mobile and interconnected solution. This is likely to be reflected in the upcoming results. The consensus estimate for Services and Software revenues is $841 million, which indicates growth from the year-ago figure of $773 million.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $2,055 million, which indicates growth from the year-ago quarter’s reported figure of $1,971 million. The consensus estimate for adjusted earnings per share is pegged at $1.87, which suggests a decrease from $2.07 recorded in the prior-year quarter owing to high operating expenses and a challenging macroeconomic environment that strained margins.
Earnings Whispers
Our proven model does not predict an earnings beat for Motorola in the second quarter. 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 0.00%, with both pegged at $1.87. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
The Earnings ESP for Qorvo Inc. (QRVO - Free Report) is +0.41% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Aug 3.
The Earnings ESP for Advanced Micro Devices, Inc. (AMD - Free Report) is +1.66% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Aug 2.
Image: Bigstock
Will Modest Top-Line Growth Aid Motorola (MSI) Q2 Earnings?
Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report second-quarter 2022 results on Aug 4, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.6%. It pulled off a trailing four-quarter earnings surprise of 7.4%, on average.
The Chicago, IL-based company is expected to have recorded year-over-year higher revenues on the back of growth in both segments — Products and Systems Integration, and Services and Software. It benefits from the increasing demand for its mission-critical technologies in North America and globally.
Factors at Play
During the quarter, Motorola secured a contract to provide Swisscom with an advanced 3GPP standards-compliant push-to-talk (PTT) solution. The PTT service connects individuals and groups instantaneously over Swisscom’s broadband network and allows it to offer priority usage to critical users in emergency situations. It also secured a prime contract for an undisclosed amount from National Highways to provide VB400 body-worn cameras for the safety and security of employees and passengers across the strategic road network of England. With road journeys gradually picking up pace, the contract will offer the requisite wherewithal to the government firm that operates and maintains 4,300 miles of motorway and major roads in England 24/7 to ensure safer and smoother drives.
In the second quarter, Motorola inked a contract with Taiwan National Police Agency to strengthen the public-safety communications system. Per the deal, it will enable advanced digitally encrypted radio communications based on the P25 standard for a secure and resilient private communications system to support public safety. Motorola deployed the TETRA (Terrestrial Trunked Radio) communication system in the Kansai International Airport in Japan in a major boost to the South East Asian country’s tourism and aviation sector. It has also deployed several two-way radios across these airport facilities for seamless communications with air traffic control, runway management, security, ground staff, bus transit services and commercial airlines.
Riding on such state-of-the-art products, Motorola expects to record strong demand across video security and services, land mobile radio products and related software while benefiting from a solid foundation. These systems drive the demand for additional device sales and promote software upgrades and infrastructure expansion. The comprehensive suite of services ensures continuity and reduces risks related to critical communications operations. These developments are expected to have positively impacted its performance in the quarter.
The Zacks Consensus Estimate for the Products and Systems Integration segment’s revenues is pegged at $1,220 million. The figure indicates a rise from $1,198 million recorded in the year-ago quarter.
During the quarter, Motorola announced that its Pronto solution is being utilized by the frontline personnel within Surrey Police and Sussex Police forces to gain immediate access to the comprehensive international criminal database of the INTERPOL. The Pronto digital policing application software simplifies and streamlines disparate business processes from time-consuming, paper-based and resource-intensive systems into an efficient, effective, mobile and interconnected solution. This is likely to be reflected in the upcoming results. The consensus estimate for Services and Software revenues is $841 million, which indicates growth from the year-ago figure of $773 million.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $2,055 million, which indicates growth from the year-ago quarter’s reported figure of $1,971 million. The consensus estimate for adjusted earnings per share is pegged at $1.87, which suggests a decrease from $2.07 recorded in the prior-year quarter owing to high operating expenses and a challenging macroeconomic environment that strained margins.
Earnings Whispers
Our proven model does not predict an earnings beat for Motorola in the second quarter. 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 0.00%, with both pegged at $1.87. 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-eps-surprise | Motorola Solutions, Inc. Quote
Zacks Rank: Motorola has a Zacks Rank #2.
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:
Keysight Technologies, Inc. (KEYS - Free Report) is set to release quarterly numbers on Aug 17. It has an Earnings ESP of +1.23% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Qorvo Inc. (QRVO - Free Report) is +0.41% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Aug 3.
The Earnings ESP for Advanced Micro Devices, Inc. (AMD - Free Report) is +1.66% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Aug 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.