Motorola Solutions Inc. ( MSI ) reported fourth-quarter 2013 financial results, where both its top and bottom line surpassed the Zacks Consensus Estimate. However, the company slashed its first-quarter 2014 outlook, which impacted the stock price of the company. Consequently, Motorola Solutions is presently trading at $61.55, reflecting a 8.28% dip in the before market trading session.
Quarterly GAAP net income from continuing operations was $343 million or $1.31 per share compared with $336 million or $1.18 per share in the prior-year quarter. Adjusted earnings per share of $1.57 were higher than the Zacks Consensus Estimate of $1.50. Quarterly total revenue was $2,504 million, up 3% year over year and also above the Zacks Consensus Estimate of $2,484 million.
Quarterly gross margin was 48.5% against 50.3% in the prior-year quarter. Operating income, in the reported quarter, was $413 million, down 2% year over year. Quarterly operating margin was 16.5% compared with 17.3% in the prior-year quarter. In the reported quarter, Motorola Solutions repurchased shares worth $362 million.
Motorola Solutions generated $944 million in cash from operations in fourth-quarter 2013 compared with $1,068 million in the year-ago quarter. Quarterly free cash flow was $753 million versus $881 million in the year-ago quarter.
At the end of the fourth quarter of 2013, Motorola Solutions had $3,225 million in cash, cash equivalents and marketable securities compared with $1,468 million at the end of 2012. Total debt, at the end of the reported quarter, was $2,457 million compared with $1,859 million at the end of 2012. The debt-to-capitalization ratio at the end of fourth-quarter 2013 was 0.48 compared with 0.36 at the end of 2012.
Government Segment
Quarterly total revenue was $1,768 million, up 4% year over year. Operating income came in at $332 million, down 4% from the previous year.
Enterprise Segment
Quarterly total revenue was $736 million, flat year over year. Operating income stood at $81 million, up 5% year over year.
Performance by Category
Quarterly Product revenues were $1,776 million, down 0.7% year over year. Services revenues were $728 million, up 11.7% year over year. Quarterly Product gross margin was 53.1% compared with 55.8% in the year-ago quarter. Services gross margin was 37.1% against 35.4% in the comparable year-ago quarter.
Financial Outlook
Motorola Solutions expects revenues for first-quarter 2014 to drop 4 - 6% from first-quarter 2013 while Non-GAAP earnings per share from continuing operations to be in the range of $0.46 to $0.52 per share.
For full-fiscal 2014, Motorola Solutions expects earnings growth to remain flat or increase by 2% as compared with the last fiscal. Non-GAAP earnings per share from continuing operations for fiscal 2014 are expected to be 18.5% of revenues.
Motorola Solutions currently has a Zacks Rank #3 (Hold).
Other Stocks to Consider
Other stocks worth considering in this sector include Nokia Corp. ( NOK ), Comtech Telecommunications Corp. ( CMTL ), and InterDigital, Inc. ( IDCC ). All three carry a Zacks Rank #2 (Buy).
COMTECH TELECOM (CMTL): Free Stock Analysis Report
INTERDIGITL INC (IDCC): Free Stock Analysis Report
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): 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 Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
