We reaffirm our Neutral recommendation on
Motorola Solutions Inc.
). The company reported strong financial results for the first
quarter of 2012, beating the Zacks Consensus Estimates. Besides,
revenue, operating income, and operating margin generated healthy
year-over-year growth. Motorola Solutions is a market leader in the
lucrative U.S. Public Safety market. Though the federal budgetary
pressures are anticipated to continue, the state and local level
agencies have become a major growth driver for it.
Motorola Solutions' business model remains compelling and we
believe the company will be able to maintain its current top-line
growth in the future primarily due to the critical nature of the
public safety network in the U.S. along with massive growth
potential in the Middle East. The company has a massive $6 billion
of order backlog. Meanwhile, despite a moderate broader market, the
stock price soared 22.5% in the last year.
Motorola Solutions caters to a large set of industries including
Transportation & Logistics, Hospitality, Public Safety, Retail,
Wholesale Distribution, Oil & Natural Gas, Utilities, to name a
few. Motorola Solutions already won several lucrative contracts
from various municipalities in the U.S. Outside the U.S., the
company is expanding in the Europe, the Middle East, Australia, and
Latin America. The company assumes responsibility from Nokia
Siemens Networks to deploy Norway's nationwide public safety
project. The size of the contract is $750 million through 2026.
Nokia Siemens Network is a 50-50 joint venture between
The Board of Directors of Motorola Solutions earlier authorized
the initiation of a regular quarterly dividend of $0.22 per share
and a share buyback program of $2 billion through the end of 2012.
The Board has further raised its ongoing share buyback program from
$2 billion to $3 billion, which is expected to be completed by the
end of 2012.
MOTOROLA SOLUTN (MSI): Free Stock Analysis
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