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Motorola Solutions, Inc. (MSI - Free Report) reported strong first-quarter 2018 results on the back of healthy growth across all geographic regions. GAAP earnings for the reported quarter were $117 million or 69 cents per share compared with $77 million or 45 cents per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth. Excluding non-recurring items, non-GAAP earnings for the reported quarter were $1.10 per share compared with 71 cents in the year-ago quarter. The bottom line exceeded the Zacks Consensus Estimate of 86 cents.
Motorola Solutions, Inc. Price, Consensus and EPS Surprise
Net sales in the reported quarter came in at $1,468 million compared with $1,281 million in the year-ago quarter, driven by organic growth of 10% and healthy performance across all regions. Quarterly sales exceeded the Zacks Consensus Estimate of $1,371 million.
Segmental Details
Net sales from Product were $801 million compared with $703 million in the prior-year quarter, primarily led by growth in every region. Total segment backlog at the end of the quarter increased for the 14th consecutive quarter to $1.7 billion (up $166 million or 11% year over year), driven by North America and EMEA.
Aggregate quarterly revenues from Services came in at $667 million compared with $578 million in the year-ago quarter, driven by solid performance by Managed & Support Services.
Margins
GAAP operating income for the reported quarter was $171 million compared with $173 million in the prior-year quarter while the respective tallies for non-GAAP operating income were $260 million and $212 million. GAAP operating margin for the quarter declined to 11.6% from 13.5% due to higher transaction costs related to acquisitions, partially offset by higher sales volume. Non-GAAP operating margin was 17.7% compared with 16.5% in the year-ago quarter owing to top-line growth.
Non-GAAP operating income for Products was $127 million, up 35% year over year for non-GAAP operating margin of 15.9%, up 250 basis points (bps) from last year, driven by higher sales.
Non-GAAP operating income for Services was $133 million, up 13% year over year for non-GAAP operating margin of 19.9%, down 50 bps due to higher expenses related to acquisitions
Balance Sheet and Cash Flow
Motorola exited the quarter with total cash and cash equivalents of $858 million and long-term debt of $5,304 million. For the first three months of 2018, the company utilized cash of $500 million for operating activities against cash flow of $142 million in the prior-year period, owing to significant pension contribution.
Outlook Raised
Motorola is poised to gain from robust organic growth, disciplined capital deployment and a favorable global macroeconomic environment. With solid quarterly results and continued strength in order trajectory, management has raised the earlier guidance for 2018. Full-year adjusted earnings are currently anticipated to lie within the $6.70-$6.85 per share range, up from $6.50-$6.65 expected earlier on revenue growth of 14%, up from prior expectations of 10-11% growth. Second-quarter 2018 adjusted earnings are expected to lie within the $1.34-$1.39 per share range on revenue growth of 15%.
Zacks Rank & Stocks to Consider
Motorola currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the industry are SITO Mobile, Ltd. and PCTEL, Inc. , both carrying a Zacks Rank #2 (Buy), and Comtech Telecommunications Corp. (CMTL - Free Report) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SITO Mobile has long-term earnings growth expectations of 25%.
PCTEL has a positive earnings surprise history with an average of 17.9% in the trailing four quarters, beating estimates twice.
Comtech Telecommunications has long-term earnings growth expectations of 5%. It has a positive earnings surprise history with an average of 111.4% in the trailing four quarters, beating estimates in each.
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Motorola (MSI) Beats Q1 Earnings & Sales Estimates, Ups View
Motorola Solutions, Inc. (MSI - Free Report) reported strong first-quarter 2018 results on the back of healthy growth across all geographic regions. GAAP earnings for the reported quarter were $117 million or 69 cents per share compared with $77 million or 45 cents per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth. Excluding non-recurring items, non-GAAP earnings for the reported quarter were $1.10 per share compared with 71 cents in the year-ago quarter. The bottom line exceeded the Zacks Consensus Estimate of 86 cents.
Motorola Solutions, Inc. Price, Consensus and EPS Surprise
Motorola Solutions, Inc. Price, Consensus and EPS Surprise | Motorola Solutions, Inc. Quote
Net sales in the reported quarter came in at $1,468 million compared with $1,281 million in the year-ago quarter, driven by organic growth of 10% and healthy performance across all regions. Quarterly sales exceeded the Zacks Consensus Estimate of $1,371 million.
Segmental Details
Net sales from Product were $801 million compared with $703 million in the prior-year quarter, primarily led by growth in every region. Total segment backlog at the end of the quarter increased for the 14th consecutive quarter to $1.7 billion (up $166 million or 11% year over year), driven by North America and EMEA.
Aggregate quarterly revenues from Services came in at $667 million compared with $578 million in the year-ago quarter, driven by solid performance by Managed & Support Services.
Margins
GAAP operating income for the reported quarter was $171 million compared with $173 million in the prior-year quarter while the respective tallies for non-GAAP operating income were $260 million and $212 million. GAAP operating margin for the quarter declined to 11.6% from 13.5% due to higher transaction costs related to acquisitions, partially offset by higher sales volume. Non-GAAP operating margin was 17.7% compared with 16.5% in the year-ago quarter owing to top-line growth.
Non-GAAP operating income for Products was $127 million, up 35% year over year for non-GAAP operating margin of 15.9%, up 250 basis points (bps) from last year, driven by higher sales.
Non-GAAP operating income for Services was $133 million, up 13% year over year for non-GAAP operating margin of 19.9%, down 50 bps due to higher expenses related to acquisitions
Balance Sheet and Cash Flow
Motorola exited the quarter with total cash and cash equivalents of $858 million and long-term debt of $5,304 million. For the first three months of 2018, the company utilized cash of $500 million for operating activities against cash flow of $142 million in the prior-year period, owing to significant pension contribution.
Outlook Raised
Motorola is poised to gain from robust organic growth, disciplined capital deployment and a favorable global macroeconomic environment. With solid quarterly results and continued strength in order trajectory, management has raised the earlier guidance for 2018. Full-year adjusted earnings are currently anticipated to lie within the $6.70-$6.85 per share range, up from $6.50-$6.65 expected earlier on revenue growth of 14%, up from prior expectations of 10-11% growth. Second-quarter 2018 adjusted earnings are expected to lie within the $1.34-$1.39 per share range on revenue growth of 15%.
Zacks Rank & Stocks to Consider
Motorola currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the industry are SITO Mobile, Ltd. and PCTEL, Inc. , both carrying a Zacks Rank #2 (Buy), and Comtech Telecommunications Corp. (CMTL - Free Report) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SITO Mobile has long-term earnings growth expectations of 25%.
PCTEL has a positive earnings surprise history with an average of 17.9% in the trailing four quarters, beating estimates twice.
Comtech Telecommunications has long-term earnings growth expectations of 5%. It has a positive earnings surprise history with an average of 111.4% in the trailing four quarters, beating estimates in each.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>