MSI Motorola Solutions Inc

Motorola Solutions Inc. (MSI), one of the leaders in the lucrative U.S. Public Safety market,received a contract worth $22 million from ComEd, an electric supply company and a part of Exelon Corporation (EXC).

Motorola Solutions will provide 900 MHz ASTRO 25 digital trunked radio systems, a two-way digital radio transmission system, which offers consistently clear audio service across its footprint. Even if there is any disruption in power supply during heavy storm, the new technology will continue to transmit voice along with important information to ComEd field workers, hence maintaining smooth work-flow.

ComEd, like other utility companies, uses backdated 900 MHz land mobile radio frequency. Therefore, implementation of this new technology by Motorola Solutions will help ComEd to cover an extensive area of 11,400 square miles in northern Illinois, including the city of Chicago. Motorola’s XTL and XTS series of digital mobile and portable radios and GTR8000 base station radios will provide support to the new technology for gaining efficiency in delivering high quality voice, data and GPS support.   

Motorola’sbusiness model remains compelling and we believe the company will be able to maintain its current top-line growth going forward, primarily due to the critical nature of the public safety network in the U.S. and massive growth potential in the Middle East.  Furthermore, the company has entered into an agreement with Verizon Wireless (VZ) to install a standard-based public safety broadband network for mission-critical operations leveraging on the nationwide LTE network of Verizon, which we believe will act as a positive catalyst for the stock going forward.

Despite these positive traits, we believe that slowdown in the government expenditures due to budgetary pressures, particularly at the state and local level, may significantly jeopardize the company’s overall financials as the company is heavily dependent on Government expenditures. Moreover, the recent decision of Sprint Nextel Corporation (S) to gradually phase-out iDEN network may also hurt the company’s profitability going forward. We, thus, maintain our long-term Neutral recommendation on Motorola Solutions Inc.

Currently, Motorola Solutions Inc.  has a Zacks #2 Rank, implying a short-term Buy rating.

Motorola Solutions Inc., based in Schaumburg, Illinois, is a leading communications equipment manufacturer, with a strong market position in bar code scanning, wireless infrastructure gear, and government communications.

 
EXELON CORP (EXC): Free Stock Analysis Report
 
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
 
SPRINT NEXTEL (S): Free Stock Analysis Report
 
VERIZON COMM (VZ): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research