Motorola Solutions (
) saw improving profitability during Q1 2011. The company's gross
profit margin for the quarter improved to 50.3%, up from 49.3% in
the same quarter last year, while its operating profit jumped to
11.3% from 8.7% last year. These are encouraging signs for Motorola
Solutions, which competes with big name players like Cisco (
We currently maintain a
$40.24 price estimate for Motorola Solutions
, which is about 10% below market price.
Motorola Solutions not only increased its gross margins, but was
also able to raise operating margins through effective management
of operating expenses. We estimate that R&D and SG&A
expenses will continue to decline with respect to revenues, as
illustrated in the interactive chart above.
Regarding operating expense management, the company noted:
Our profitability also improved with operating earnings
representing 11.7% of sales this quarter compared to 8.7% in Q1
of last year. This increase in operating earnings was driven by
higher gross margins due to favorable product mix and a continued
focus on operating expense management to drive further operating
Details About Motorola Solutions' Business
Motorola Solutions' main business is the sale of security
devices to the U.S. government and enterprises (for commercial
These devices are used by the government for:
1) Police department patrol car communication and facilitation
of efficient response to crime incidents.
2) Electric power distribution, fire station alerts, irrigation
control and video for traffic control purposes.
Enterprises use Motorola Solutions' products for a variety of
purposes including baggage tracking at airports and transit
authorities, Wireless LAN for retailers to drive workforce
productivity, technology solutions for healthcare centers, and
wireless connectivity at universities.
See our full analysis and $40.24 price estimate
for Motorola Solutions