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Will Healthy Top-Line Growth Aid Motorola (MSI) Q2 Earnings?
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Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report second-quarter 2023 results on Aug 3, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.8%. It pulled off a trailing four-quarter earnings surprise of 6.9%, 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 announced that it reduced misrouted 9-1-1 calls for public safety answering points (PSAPs) by about 50% in Utah, enabling faster response time for people in distress. Leveraging the National Emergency Number Association i3-compliant 9-1-1 Next Generation Core Services call routing technology, the company has significantly improved emergency response to help save countless lives. The interoperable, resilient next-generation 9-1-1 systems are being increasingly deployed nationwide for faster emergency support. This is likely to have generated incremental revenues during the quarter.
In second-quarter 2023, Motorola secured a contract from the City of London Police for its VB400 body-worn cameras in order to boost the security of police officers. The use of body-worn cameras improves transparency and accountability, which can foster trust between law enforcement agencies and the communities they serve. Advanced features of VB400 combined with the Pronto mobile digital policing platform will significantly improve real-time communication and collaboration, enhance the decision-making process and streamline the workflow.
During the to-be-reported quarter, Motorola also secured a five-year contract from the Ministry of the Internal Administration of Portugal to maintain and enhance the country’s mission-critical public safety communications network. The agreement will facilitate 180 public safety agencies and 40,000 first responders, including police, fire and medical services, to benefit from a highly reliable and secure TETRA (Terrestrial Trunked Radio) communications network.
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 $1,424 million. The figure indicates a rise from $1,285 million recorded in the year-ago quarter. Our estimate for revenues from this segment stands at $1,399.4, implying 8.9% year-over-year growth. The Zacks Consensus Estimate for the Services and Software segment’s revenues stands at $935 million, up from $855 million recorded in the year-earlier quarter. Our estimate for revenues from this segment stands at $956.8, suggesting 11.9% year-over-year growth.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $2,357 million, which indicates growth from the year-ago quarter’s reported figure of $2,140 million. The consensus estimate for adjusted earnings per share stands at $2.51, which suggests an increase from $2.07 recorded in the prior-year quarter driven by top-line growth.
Earnings Whispers
Our proven model predicts 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 perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Amazon.com, Inc. (AMZN - Free Report) is +2.99% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Aug 3.
The Earnings ESP for Alibaba Group Holding Limited (BABA - Free Report) is +6.19% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Aug 10.
Image: Bigstock
Will Healthy Top-Line Growth Aid Motorola (MSI) Q2 Earnings?
Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report second-quarter 2023 results on Aug 3, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.8%. It pulled off a trailing four-quarter earnings surprise of 6.9%, 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 announced that it reduced misrouted 9-1-1 calls for public safety answering points (PSAPs) by about 50% in Utah, enabling faster response time for people in distress. Leveraging the National Emergency Number Association i3-compliant 9-1-1 Next Generation Core Services call routing technology, the company has significantly improved emergency response to help save countless lives. The interoperable, resilient next-generation 9-1-1 systems are being increasingly deployed nationwide for faster emergency support. This is likely to have generated incremental revenues during the quarter.
In second-quarter 2023, Motorola secured a contract from the City of London Police for its VB400 body-worn cameras in order to boost the security of police officers. The use of body-worn cameras improves transparency and accountability, which can foster trust between law enforcement agencies and the communities they serve. Advanced features of VB400 combined with the Pronto mobile digital policing platform will significantly improve real-time communication and collaboration, enhance the decision-making process and streamline the workflow.
During the to-be-reported quarter, Motorola also secured a five-year contract from the Ministry of the Internal Administration of Portugal to maintain and enhance the country’s mission-critical public safety communications network. The agreement will facilitate 180 public safety agencies and 40,000 first responders, including police, fire and medical services, to benefit from a highly reliable and secure TETRA (Terrestrial Trunked Radio) communications network.
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 $1,424 million. The figure indicates a rise from $1,285 million recorded in the year-ago quarter. Our estimate for revenues from this segment stands at $1,399.4, implying 8.9% year-over-year growth. The Zacks Consensus Estimate for the Services and Software segment’s revenues stands at $935 million, up from $855 million recorded in the year-earlier quarter. Our estimate for revenues from this segment stands at $956.8, suggesting 11.9% year-over-year growth.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $2,357 million, which indicates growth from the year-ago quarter’s reported figure of $2,140 million. The consensus estimate for adjusted earnings per share stands at $2.51, which suggests an increase from $2.07 recorded in the prior-year quarter driven by top-line growth.
Earnings Whispers
Our proven model predicts 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 perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.07%. 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 carries a Zacks Rank #2.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
Gogo Inc. (GOGO - Free Report) is set to release quarterly numbers on Aug 7. It has an Earnings ESP of +40.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Amazon.com, Inc. (AMZN - Free Report) is +2.99% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Aug 3.
The Earnings ESP for Alibaba Group Holding Limited (BABA - Free Report) is +6.19% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Aug 10.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.