MSI Motorola Solutions Inc

Motorola Solutions Inc. (MSI) reported strong financial results for the fourth quarter of 2011, beating the Zacks Consensus Estimates. Besides, revenue, operating income, and operating margin generated healthy year-over-year growth. The company is a market leader in the lucrative U.S. Public Safety market. While the federal budgetary pressures are anticipated to continue, the state and local level agencies have become a major growth driver for Motorola Solutions.

Motorola’s business model remains compelling and we believe the company will be able to maintain its current top-line growth in the future , primarily due to the critical nature of the public safety network in the U.S. along with massive growth potential in the Middle East. Meanwhile, the stock is currently trading at the high-end of its 52-week price range, which may restrict above market gains anytime soon. We, thus, reaffirm our Neutral recommendation on the stock.

Motorola Solutions caters to a large set of industries including Transportation & Logistics, Hospitality, Public Safety, Retail, Wholesale Distribution, Oil & Natural Gas, Utilities, to name a few. Motorola Solutions already won several lucrative contracts from various municipalities in the U.S. Outside the U.S., the company is expanding in the Europe, the Middle East, Australia, and Latin America. Recently, the company assumes responsibility from Nokia Siemens Networks to deploy Norway’s nationwide public safety project. The size of the contract is $750 million through 2026. Nokia Siemens Networks is a 50-50 joint venture between Nokia Corp. (NOK) and Siemens AG (SI).

The board of directors of Motorola Solutions earlier authorized the initiation of a regular quarterly dividend of $0.22 per share and a share buyback program of $2 billion through the end of 2012. Recently, the board has further raised its ongoing share buyback program from $2 billion to $3 billion, which is expected to be completed by the end of 2012.

 
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