On May 21, 2014, we issued an updated research report on
Motorola Solutions Inc.
). The company posted dismal financial results for the first
quarter of 2014 with both the top and the bottom lines missing the
respective Zacks Consensus Estimate. Lower contract wins and
sluggish economic trends have forced the company to slash its
revenue outlook and divest its Enterprise Business segment.
Motorola Solutions has delivered positive earnings surprises in
three of the last four quarters, with an average surprise of
In the first quarter of 2014, Motorola Solutions performed poorly
in several metrics. The company reported a decline in revenues
across both its segments. Management expects revenues in
second-quarter 2014 to drop 5-8% from the prior-year period. The
company exited the reported quarter with nearly $2.5 billion debt
and a debt-to-capitalization ratio of 0.40.
Moreover, the decision of
) to gradually phase out iDEN network is another major setback for
Motorola Solutions. To worsen matters, Sprint started the
elimination of iDEN networks in 2013 and the entire process will
take around 3 to 4 years.
Moreover, Motorola Solutions is heavily dependent on government
expenditures for its revenues as 70% of its total sales are
generated from government agencies. Thus, reduction in government
expenditure and macroeconomic fluctuations are likely to affect
sales of the company.
Motorola Solutions currently has a Zacks Rank #5 (Strong Sell).
Stocks That Warrant a Look
Other stocks worth considering in this sector include
). Both the stocks have a Zacks Rank #1 (Strong Buy).
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MOTOROLA SOLUTN (MSI): Free Stock Analysis
POLYCOM INC (PLCM): Free Stock Analysis Report
SPRINT CORP (S): Free Stock Analysis Report
SHORETEL INC (SHOR): Free Stock Analysis Report
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