By Ben Fox Rubin
Motorola Solutions Inc.'s (MSI) second-quarter income slumped
48% as the enterprise business continued to show weakness and
expenses rose.
Motorola Solutions raised its full-year revenue guidance, now
seeing 5% to 6% in growth. The company previously forecast a 5%
improvement.
For the current quarter, the company expects downbeat earnings
from continuing operations of 69 cents to 74 cents a share on sales
growth of 3%. Analysts surveyed by Thomson Reuters predicted 78
cents in earnings and 4% revenue growth.
The company boosted its share repurchase program by $2 billion,
setting no expiration date. The increase is in addition to a
previous $3 billion authorization, which still has about $100
million left in it. Motorola Solutions also said it raised its
dividend 18% to 26 cents a share.
The provider of public-safety radios, handheld scanners and
telecommunications-network gear was created last year in the split
of Motorola Inc. Google Inc. (GOOG) paid $12.5 billion for the
higher-profile mobile-devices and TV-set-top-box operations, named
Motorola Mobility Holdings Inc.
In recent quarters, Motorola Solutions' bottom line has been
weighed down by charges, even as sales grow. The company had
previously warned its earnings this year would be pressured by
lower sales in its iDEN network business.
Motorola Solutions posted a profit of $182 million, or 61 cents
a share, down from $349 million, or $1 a share, a year earlier.
Excluding stock-based compensation and other items, earnings from
continuing operations rose to 70 cents from 54 cents, reaching the
high end of the company's April prediction of 65 cents to 70
cents.
Revenue rose 8.3% to $2.15 billion, while analysts polled by
Thomson Reuters recently expected revenue of $2.11 billion.
Gross margin shrank to 49.3% from 50.8%, as input costs rose
11%.
Government sales increased 14% to $1.46 billion, driven by
growth across all regions. The smaller enterprise business posted
1.6% lower revenue at $689 million, hurt by a decline in iDEN
sales.
Shares closed at $45.29 on Tuesday and were inactive premarket.
The stock is down 2.2% since the start of the year.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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