Motorola Solutions Misses on Q1 Earnings, Revs - Analyst Blog

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Motorola Solutions Inc. ( MSI ) reported disappointing financial results for the first quarter of 2014, where both its top and bottom line missed the Zacks Consensus Estimate.

Quarterly GAAP net income came in at $127 million or 49 cents per share compared with $192 million or 68 cents per share in the prior-year quarter. Adjusted earnings per share of 40 cents were a penny shy of the Zacks Consensus Estimate. Quarterly total revenue was $1,801 million, up 8.7% year over year and but fell below the Zacks Consensus Estimate of $1,821 million.

Quarterly gross margin stood at 46.9% against 48.4% in the prior-year quarter. Operating income, in the reported quarter, was $170 million, down 21.3% year over year. Quarterly operating margin was 9.4% compared with 10.9% in the prior-year quarter. In the reported quarter, Motorola Solutions repurchased shares worth $57 million.

Motorola Solutions generated $46 million in cash from operations in first-quarter 2014 compared with a negative $31 million in the year-ago quarter. Quarterly free cash flow was $1 million as against a negative $77 million in the year-ago quarter.

At the end of the first quarter of 2014, Motorola Solutions had $3,141 million in cash, cash equivalents and marketable securities compared with $3,225 million at the end of 2013. Total debt, at the end of the reported quarter, stood at $2,466 million as against $2,457 million at the end of 2013. The debt-to-capitalization ratio at the end of first-quarter 2014 was 0.40 compared with 0.48 at the end of 2013.

Government Segment

Quarterly total revenue was $1,201 million, down 11% year over year. Operating income came in at $113 million, down 37% year over year.

Enterprise Segment

Quarterly total revenue was $600 million, down 4% year over year. Operating income stood at $57 million, up 58% year over year.

Performance by Category

Quarterly Product revenues totaled $1,211 million, down 12.3% year over year. Services revenues were $590 million, remaining almost flat year over year. Quarterly Product gross margin was 51.9% compared with 52.9% in the year-ago quarter. Services gross margin was 36.8% as against 38% in the comparable year-ago quarter.

Financial Outlook

Motorola Solutions expects revenues for second quarter of fiscal 2014 to drop 5% - 8% year over year while Non-GAAP earnings per share are likely to be in the range of 58 cents to 64 cents.

For full-fiscal 2014, Motorola Solutions expects revenues to decline by a low single digit year over year. Non-GAAP operating margin is estimated to be around 18.5%.

Other Stocks to Consider

Motorola Solutions currently has a Zacks Rank #5 (Strong Sell). Other stocks worth considering in the wireless equipment sector include Polycom Inc. ( PLCM ), ShoreTel Inc. ( SHOR ) and Harris Corp. ( HRS ). Both Polycom and ShoreTel currently carry a Zacks Rank #1 (Strong Buy) whereas Harris carries a Zacks Rank #2 (Buy).



HARRIS CORP (HRS): Free Stock Analysis Report

MOTOROLA SOLUTN (MSI): Free Stock Analysis Report

POLYCOM INC (PLCM): Free Stock Analysis Report

SHORETEL INC (SHOR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: HRS , MSI , PLCM , SHOR

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