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Motorola to Boost R&D Activities With New Innovation Center

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Motorola Solutions, Inc. (MSI - Free Report) has opened its first college campus innovation center at the University of Illinois Urbana-Champaign Research Park. The move will provide the company with access to a depth of talent across a number of disciplines, encouraging research in areas that are critical to its future.

The university’s Research Park — an incubator for new ideas — is a technology hub for startup companies and corporate R&D operations. Within it, there are 120 companies employing students and full-time professionals.

The new Motorola center, opened in the Fall 2019 semester, has capacity for up to 40 interns with an option for full-time employees in the future. Interns and employees will work directly with the company’s staff to help move ideas to test mode more quickly.

This center will employ undergraduate and graduate students from a variety of backgrounds to focus on developing products, applications and services in key growth areas, including command center software, and video security and analytics. Students will focus on projects for the company’s Chief Technology Office, Advanced Technology and Products organizations.

As a leading provider of mission-critical communication products and services worldwide, Motorola has ensured a steady revenue stream from this niche market. The communications equipment maker aims to reinforce its position in the public safety domain by entering into alliances with other players in the ecosystem.

The company is likely to benefit from organic growth and acquisition initiatives, disciplined capital allocation, and favorable macroeconomic climate. Its competitive position together with an attractive portfolio for large addressable market augurs well for future growth.

In the last earnings report, the company’s net sales were $1,860 million compared with $1,760 million in the year-ago quarter, primarily driven by growth in both the segments (i.e. Products and Systems Integration, and Services and Software) with solid performance in the Americas.

While organic growth was 4%, acquisitions contributed $33 million to incremental revenues. Region wise, revenues improved 11% in the Americas to $1,347 million supported by broad base growth across all platforms.

Motorola has long-term earnings growth expectation of 7.7%. Backed by strong business trends including the value of its unique public safety ecosystem, the stock has added 45.2% compared with the industry’s growth of 17.3% in the year-to-date period. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 6.9%.

Zacks Rank & Stocks to Consider

Motorola currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include PCTEL, Inc. (PCTI - Free Report) , Nokia Corp. (NOK - Free Report) and Viasat, Inc. (VSAT - Free Report) . While PCTEL sports a Zacks Rank #1 (Strong Buy), Nokia and Viasat carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PCTEL surpassed earnings estimates in each of the trailing four quarters, the average surprise being 110.4%.

Nokia surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 89.3%.

Viasat surpassed earnings estimates in each of the trailing four quarters, the average surprise being 59.4%.

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