Earnings Preview: Motorola Solutions - Analyst Blog
23 Aprile 2012 - 12:00PM
Zacks
Motorola Solutions
Inc.(MSI) is slated to release its first quarter 2011
results on Wednesday, April 25, before the opening bell. The
current Zacks Consensus Estimate for the first quarter is pegged at
47 cents, representing an annualized growth of 1.3%.
With respect to earnings surprises
over the trailing four quarters, Motorola Solutions has
outperformed the Zacks Consensus Estimate in all the four quarters.
The average earnings surprise was positive 27.26%, implying that
the company has outdone the Zacks Consensus Estimate by the same
magnitude over the last four quarters.
Fourth Quarter
Recap
Quarterly GAAP net income from
continuing operation was $184 million or 54 cents per share
compared with $292 million or 49 cents per share in the prior-year
quarter. However, adjusted (excluding special items) EPS in the
fourth quarter of 2011 came in at 78 cents, surpassing the Zacks
Consensus Estimate of 74 cents.
Quarterly total revenue was $2,300
million, up 5% year over year and marginally ahead of the Zacks
Consensus Estimate of $2,286 million. Quarterly gross margin was
50.4% compared with 49.8% in the prior-year quarter. Quarterly
operating margin stood at 12% versus 12.4% in the prior-year
quarter.
Agreement of Estimate
Revisions
In the last 30 days, out of the
five analysts covering the stock, none revised the estimate over
the first quarter and second quarter of 2012. Similarly, for fiscal
2012 and 2013, out of the 6 analysts covering the stock none raised
or slashed the EPS estimate.
Magnitude of Estimate
Revisions
For the ongoing quarter of fiscal
2012, the current Zacks Consensus Estimate was just a penny above
the previous estimates of 46 cents. Likewise, for the second
quarter of fiscal 2012, the current Zacks Consensus Estimate was
just a penny above the previous estimates of 60 cents in the last
30 days.
For fiscal 2012, the current Zacks
Consensus Estimate was in line with the earlier estimate of $2.73.
However, for fiscal 2013, the current estimate is pegged at $3.27,
which is also 4 cents above the earlier estimate.
Earnings
Surprises
The first and second quarter of
2012 represent a 4.26% and 14.75% downside potential (essentially a
proxy for future earnings surprises), respectively. Similarly,
fiscal 2012 and 2013 reflect 4.26% and 14.75% downside potentials,
respectively.
Our Take
Motorola’s business model remains
compelling and we believe that 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
Communication Inc. (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.
Currently, Motorola Solutions Inc.
has a Zacks #2 Rank, implying a short-term Buy rating.
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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