Before the opening bell,
Motorola Solutions Inc.
) reported strong financial results for the fourth quarter of
2012, with the bottom line surpassing the Zacks Consensus
Estimate but the top line missing the same.
Fourth-Quarter Results in Details
Quarterly GAAP net income from continuing operations was $423
million or $1.18 per share compared with $276 million or 54 cents
per share in the prior-year quarter.
Adjusted EPS of $1.10 in the quarter was well above the Zacks
Consensus Estimate of 92 cents. Quarterly total revenue was
$2,441 million, up 6% year over year, but was slightly below the
Zacks Consensus Estimate of $2,454 million. The growth in revenue
was mainly fueled by higher global demand across the government
Quarterly gross margin was 50.3% compared with 50.4% in the
prior-year quarter. Operating income in the reported quarter was
$423 million, up by a whopping 53.3% year over year. Quarterly
operating margin was 17.3% versus 12% in the prior-year quarter.
During the fourth quarter of 2012, Motorola Solutions repurchased
shares worth $326 million.
During the quarter, Motorola Solutions generated $564 million
in cash from operations compared with $44 million in the year-ago
quarter. Quarterly free cash flow (operating cash flow less
capital expenditure) was $517 million compared with a negative
$39 million in the prior-year quarter.
At the end of the fourth quarter of fiscal 2012, Motorola
Solutions had $3,603 million in cash, cash equivalents and
marketable securities against $5,091 million at the end of fiscal
2011. Total debt at the end of the quarter was $1,859 million
compared with $1,130 million at the end of fiscal 2011.
Debt-to-capitalization ratio at the end of the reported quarter
was 0.36 compared with 0.18 at the end of fiscal 2011.
Quarterly total revenue was $1,708 million, up 10% year over
year. Operating income came in at $346 million, up by a
significant 53% year over year.
Quarterly total revenue was $733 million, down 3% year over
year. Operating income stood at $77 million, up 54% year over
Performance by Category
Quarterly product revenue was $1,789 million, up 5.9% year
over year. Services revenue was $652 million, up 6.7% year over
year. Quarterly product gross margin was 55.8% compared with
54.2% in the year-ago quarter. Services gross margin was 35.4%
compared with 40.1% in the year-ago quarter.
Future Financial Outlook
Motorola Solutions expects first-quarter 2013 revenue to grow
between 4% and 5% year over year. EPS from continuing operations
is expected in the range of 62 cents to 67 cents.
For fiscal 2013, revenue is expected to grow 5% to 5.5% year
over year while Non-GAAP operating income is expected to be 18%
of the total revenue.
Other Stocks Set for Earnings Release
Some other companies, which are about to release their
financial results in the upcoming days are
), which will report its fourth quarter results on Jan 24
Harris Corporation (
is set to releaseits second quarter 2013 results on Jan 29.
We believe that huge market share for public safety products,
recent acquisition and continuous order wins will consistently
drive both the top and bottom lines of the company going
However, the company is heavily dependent on government
expenditures for its revenue. Approximately 65% of the total
sales of Motorola Solutions are from government agencies.
Therefore, we believe that a slowdown in the government
expenditures owing to budgetary pressures may significantly
jeopardize the company's overall financials; hence the company
has also slashed its future growth outlook. Moreover,
Sprint Nextel Corp
) has planned to gradually phase out of iDEN network, which may
act as a major setback for the company going forward.
Currently, Motorola Solutions Inc. has a Zacks Rank #3
HARRIS CORP (HRS): Free Stock Analysis Report
MOTOROLA SOLUTN (MSI): Free Stock Analysis
NOKIA CP-ADR A (NOK): Free Stock Analysis
SPRINT NEXTEL (S): Free Stock Analysis Report
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