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Motorola Solutions (MSI) Q3 Earnings: A Surprise in Store?

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Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report third-quarter 2016 results on Nov 3, after the market closes.

In the last quarter, Motorola Solutions posted a positive earnings surprise of 14.44%. The company has an impressive track record with respect to earnings. Motorola Solutions outpaced the Zacks Consensus Estimate in each of the last four quarters with an average beat of 16.44%.

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

Factors Likely at Play

Motorola Solutions’ top line is expected to be boosted by continued synergies from the Airwave Solutions acquisition. Also, Motorola Solutions’ product portfolio continues to impress. The company has put in significant efforts to enhance its public safety LTE portfolio by investing heavily in Android and devices. Such initiatives should have a positive impact on the upcoming earnings.

However, the company’s weak balance sheet remains a concern. MotorolaSolutions’ revenues are significantly reliant on government agencies, which is another risk. The company also faces tough competition from the likes of Juniper Networks Inc.(JNPR - Free Report) , Nokia Corporation (NOK - Free Report) and Harris Corporation . We are also concerned about the bottom line being hurt by adverse foreign exchange movements.

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 Earnings ESP for the company stands at 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.14. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

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.

Conversely, we advise investors not to consider Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions. You can see the complete list of today’s Zacks #1 Rank stocks here.

MOTOROLA SOLUTN Price and EPS Surprise

 

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