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Motorola (MSI) to Post Q2 Earnings: Is a Beat in Store?

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Motorola Solutions, Inc. (MSI - Free Report) is scheduled to report second-quarter 2018 results after the closing bell on Aug 2. In the last reported quarter, the company delivered a positive earnings surprise of 27.9%. Notably, Motorola surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters with an average beat of 12.1%.

The company is likely to report higher consolidated revenues on a year-over-year basis supported by healthy growth dynamics. Whether this could result in an earnings beat remains to be seen.

Factors to Consider

Motorola is poised to gain from robust organic growth, disciplined capital deployment and a favorable global macroeconomic environment. As the public safety market continues to embrace software offerings to enhance workflows, Motorola is able to sell cloud-first SaaS offerings in addition to on-premise solutions with ancillary implementation and managed services. The company continues to expand its software offerings to provide solutions across the various segments of the public safety workflow.

As the leading provider of mission-critical communication products and services for government and commercial customers alike, Motorola has ensured a steady revenue stream from this niche market. Clubbed with the services of other solution providers like BriefCam, its software bolsters the efficiency of crime researchers, enabling them to take quicker and smarter decisions in reaction to a criminal activity. In an effort to further expand its public safety measures, the company has launched new broadband service, high power mobile radio and mobile app solutions, dedicated to public security.

With solid organic growth driven by continued strength in order trajectory and accretive acquisitions, Motorola is likely to record healthy top-line growth. The Zacks Consensus Estimate for total revenues for the quarter is pegged at $1,709 million, up from $1,497 million reported in the year-earlier quarter.

Earnings Whispers

Our proven model conclusively shows that Motorola is likely to beat earnings this quarter as it possesses the key components. 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. This is perfectly the case here as you will see below:

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and Zacks Consensus Estimate, is +1.33% with the former pegged at $1.39 and the latter at $1.37. 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 and EPS Surprise | Motorola Solutions, Inc. Quote

Zacks Rank: Motorola has a Zacks Rank #2. This increases the predictive power of ESP and makes us reasonably confident of an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Cincinnati Bell Inc. is slated to release quarterly numbers on Aug 8. It has an Earnings ESP of +46.15% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Windstream Holdings, Inc. , with an Earnings ESP of +12.15% and a Zacks Rank #2, is slated to report results on Aug 9.

Cisco Systems, Inc. (CSCO - Free Report) has an Earnings ESP of +0.36% and a Zacks Rank #2. The company is scheduled to release earnings on Aug 15.  

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