On Feb 21, 2014, we issued an updated research report on
Motorola Solutions Inc.
). The company posted impressive financial results for the fourth
quarter of 2013 on continuous contract wins and innovative
product launches. However, the company slashed its outlook for
first-quarter fiscal 2014.
Motorola Solutions has delivered positive earnings surprise in
three of the last four quarters, with an average surprise of
negative 12.14%. The company reported better financial results
for the fourth quarter of fiscal 2013 with both the top and the
bottom line beating the respective Zacks Consensus Estimate.
Motorola Solutions remains quite optimistic regarding its future
growth. In addition to the U.S., the Middle East provides
significant market potential. The company has already won few
international public safety LTE deals of which nearly 40% span
over 10 years.
Moreover, the acquisition of Twisted Pair Solutions - which
offers a standard communications platform used in critical
situations by military, government and private enterprises
worldwide - will significantly enhance revenues at the Government
Notably, Motorola Solutions exited fiscal 2013 with $3.2 billion
of cash as compared with $1.4 billion at the end of 2012. Such a
strong cash position has allowed the company to drive
shareholders return by means of paying regular dividends and
However, the decision of
) to gradually phase out iDEN network is a setback for Motorola
Solutions. Sprint has started eliminating iDEN networks in 2013
and the total phase out will take 3 to 4 years.
Moreover, Motorola Solutions is heavily dependent on government
expenditures for its revenues as 70% of its total sales is
generated from government agencies. Reduction in government
expenditure and macroeconomic fluctuations are likely to affect
sales of the company.
Motorola Solutions currently has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Other stocks worth considering in this sector include
). Both Nokia and Harris have a Zacks Rank #2 (Buy).
HARRIS CORP (HRS): Free Stock Analysis Report
MOTOROLA SOLUTN (MSI): Free Stock Analysis
NOKIA CP-ADR A (NOK): Free Stock Analysis
SPRINT CORP (S): Free Stock Analysis Report
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