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Will Motorola (MSI) Earnings Disappoint Investors in Q2?

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Motorola Solutions, Inc.(MSI - Free Report) is scheduled to report second-quarter 2016 results on Aug 4, after market close.

In the last quarter, Motorola Solutions posted a positive earnings surprise of 27.27%. In fact, the company has an impressive track record with respect to earnings, having outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 20.13%.

Let’s see how things are shaping up for this announcement.

Factors Likely at Play

Motorola has been focused on boosting its public safety LTE portfolio with a string of investments in Android and devices like TC55, LEX 700 and LEX L10 which is expected to bolster growth. The company’s new range of products such as those compatible with TETRA two-way radios announced at Critical Communications World 2016 displays its commitment toward innovation. The company’s steady returns to shareholders also continue to impress.

However, the acquisition of U.K.-based Airwave Solutions is likely to impact results due to currency fluctuations post Brexit. Additionally, the company’s weak balance sheet coupled with heavy reliance on government agency expenditures are major concerns. The company also faces tough competition from the likes of Nokia Corporation (NOK - Free Report) and Harris Corporation . . Meanwhile, Motorola has struggled to boost revenues of late. It remains to be seen how the company performs in the second quarter.  

MOTOROLA SOLUTN Price and EPS Surprise

MOTOROLA SOLUTN Price and EPS Surprise | MOTOROLA SOLUTN Quote

Earnings Whispers

Our proven model does not conclusively show that Motorola Solutions is likely to beat the Zacks Consensus Estimate this quarter. That is because 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. That is not the case here, as you will see below:

Zacks ESP: The ESP for the company stands at 0.00% as the Most Accurate estimate is in line with the Zacks Consensus Estimate of 90 cents.

Zacks Rank: Motorola Solutions has a Zacks Rank #3 which increases the predictive power of ESP. However, that alone is not sufficient to secure an earnings beat.

As a caution, we advise investors not to consider Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement.

A Stock to Consider

Here is a company you may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter.

Analog Devices, Inc. (ADI - Free Report) has an earnings ESP of +2.63% and a Zacks Rank #2. The company is expected to report results on Aug 17.

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