MSI Motorola Solutions Inc

We reaffirm our Neutral recommendation on Motorola Solutions Inc. (MSI). The company reported strong financial results for the first quarter of 2012, beating the Zacks Consensus Estimates. Besides, revenue, operating income, and operating margin generated healthy year-over-year growth. Motorola Solutions is a market leader in the lucrative U.S. Public Safety market. Though the federal budgetary pressures are anticipated to continue, the state and local level agencies have become a major growth driver for it.

Motorola Solutions’ 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. The company has a massive $6 billion of order backlog. Meanwhile, despite a moderate broader market, the stock price soared 22.5% in the last year.

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. 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 Network 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. 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.

 
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
 
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