Motorola Solutions Inc.
) reported mixed financial results for the second quarter of
2013. Management has reduced its financial outlook for full-year
2013 for the second time. However, the board of directors has
announced several steps to enhance shareholders' wealth.
Quarterly GAAP net income from continuing operations was $258
million or 94 cents per share compared with $182 million or 60
cents per share in the prior-year quarter. Adjusted earnings per
share of $1.03 were significantly higher than the Zacks Consensus
Estimate of 92 cents. However, quarterly total revenue was $2,107
million, down 1.9% year over year and also below the Zacks
Consensus Estimate of $2,149 million.
Quarterly gross margin was 48.8% compared with 49.3% in the
prior-year quarter. Operating income, in the reported quarter,
was $266 million, down by 4.3% year over year. Quarterly
operating margin was 12.6% compared with 12.9% in the prior-year
quarter. During the second quarter of 2013, Motorola Solutions
repurchased shares worth $357 million.
During the reported quarter, Motorola Solutions generated $82
million in cash from operations compared with $254 million in the
year-ago quarter. Quarterly free cash flow was $39 million
compared with a $202 million in the prior-year quarter.
At the end of the first half of 2013, Motorola Solutions had
$3,358 million in cash, cash equivalents and marketable
securities compared with $3,603 million at the end of 2012. Total
debt, at the end of the reported quarter, was $2,456 million
compared with $1,859 million at the end of 2012. The
debt-to-capitalization ratio at the end of second-quarter 2013
was 0.47 compared with 0.36 at the end of 2012.
Quarterly total revenue was $1,451 million, down 1% year over
year. Operating income came in at $215 million, up 9% year over
Quarterly total revenue was $656 million, down 5% year over
year. Operating income stood at $51 million, down 37% year over
Performance by Category
Quarterly Product revenues were $1,479 million, down 5.4% year
over year. Services revenues were $628 million, up 7.4% year over
year. Quarterly Product gross margin was 53% compared with 54.5%
in the year-ago quarter. Services gross margin was 39% compared
with 35.7% in the year-ago quarter.
Shareholders' Wealth Enhancement
The board of directors of Motorola Solutions has decided to
raise its quarterly cash dividend by 19% to 31 cents per share.
The next quarterly dividend will be payable on Oct 15, 2013, to
stockholders of record at the close of business on Sep 13, 2013.
Moreover, the board has authorized an additional $2 billion of
share repurchase program with no expiration date.
Motorola Solutions expects revenues in the third quarter of
2013 to remain the same or fall 3% year over year. Non-GAAP
earnings per share from continuing operations are expected in the
range of 97 cents to $1.02. The tax rate is expected to be
10%-13%. For fiscal 2013, the total revenue is expected to remain
flat or rise 1% year over year, while non-GAAP operating income
is expected to be 18% of the total revenue.
Other Stocks to Consider
Motorola Solutions currently has a Zacks Rank #3 (Hold). Other
stocks worth considering in this sector include
Mitel Networks Corp. (
Sonus Networks Inc.
). All three carry a Zacks Rank #2 (Buy).
MITEL NETWORKS (MITL): Free Stock Analysis
MOTOROLA SOLUTN (MSI): Free Stock Analysis
SONUS NETWORKS (SONS): Free Stock Analysis
VIASAT INC (VSAT): Free Stock Analysis Report
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