Motorola Solutions Inc.
(
MSI
) reported better financial results for the third quarter of
2012, with both the top and bottom lines surpassing the Zacks
Consensus Estimates, mainly driven by higher global demand across
the Government segments, however slightly offset by slowdown in
Enterprisesales.
Motorola Solutions is the largest developer of public safety
products commanding nearly half of the total market share in the
U.S. 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 maintains
an impressive outlook for the fourth quarter of fiscal 2012.
The Board of Directors of Motorola Solutions recently enhanced
its shareholders' wealth. The Board has extended its ongoing
share repurchase program by another $2 billion. With this, the
Board authorized a total $5 billion for share repurchase.
Simultaneously, the Board of Directors of Motorola Solutions has
raised its quarterly dividend payment by a whopping 18% from
$0.22 per share to $0.26 per share.
However, Motorola Solutions is heavily dependent on Government
expenditures for its revenue. Approximately 65% of the company's
total sales are from government agencies. We remain concerned
that any reduction in government expenditures and the
continuation of macro-economic fluctuations may make the
company's top line volatile. Moreover,
Sprint Nextel Corp
'.s (
S
) decision to eliminate iDEN networks from 2013 onwards may
further increase the company's woes going forward.
Thus, we maintain our long-term Neutral recommendation on
Motorola Solutions Inc.
Currently,Motorola SolutionsInc.has a Zacks #2 Rank, implying
a short-term Buy rating on the stock.
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