MSI Lags Earnings, Cuts View - Analyst Blog
24 Aprile 2013 - 1:40PM
Zacks
Before the opening bell,
Motorola Solutions Inc. (MSI) reported weaker
results for the first quarter of 2013, with both the top and the
bottom lines missing the Zacks Consensus Estimate. The company has
also reduced its revenue outlook due to sluggish growth in the
Government segment.
Fourth-Quarter Results in
Details
Quarterly GAAP net income from
continuing operations was $192 million or 68 cents per share
compared with $159 million or 50 cents per share in the prior-year
quarter.
Adjusted EPS of 55 cents in the
quarter was just below the Zacks Consensus Estimate of 56 cents.
Quarterly total revenue was $1,973 million, up 1% year over year,
but was below the Zacks Consensus Estimate of $2,055 million.
Quarterly gross margin was 48.4%
compared with 49.7% in the prior-year quarter. Operating income in
the reported quarter was $216 million, down by 6.9% year over year.
Quarterly operating margin was 10.9% versus 11.9% in the prior-year
quarter. During the first quarter of 2013, Motorola Solutions
repurchased shares worth $357 million.
During the quarter, Motorola
Solutions generated negative $31 million in cash from operations
compared with $69 million in the year-ago quarter. Quarterly free
cash flow (operating cash flow less capital expenditure) was
negative $77 million compared with a $20 million in the prior-year
quarter.
At the end of the first quarter of
fiscal 2013, Motorola Solutions had $3,718 million in cash, cash
equivalents and marketable securities against $3,603 million at the
end of fiscal 2012. Total debt at the end of the quarter was $2,450
million compared with $1,859 million at the end of fiscal 2012.
Debt-to-capitalization ratio at the end of the reported quarter was
0.44 compared with 0.36 at the end of fiscal 2012.
Government
Segment
Quarterly total revenue was $1,346
million, up 3% year over year. Operating income came in at $180
million, up 20% year over year.
EnterpriseSegment
Quarterly total revenue was $627
million, down 4% year over year. Operating income stood at $36
million, down 56% year over year.
Performance by
Category
Quarterly product revenues were
$1,381 million, down 4.4% year over year. Services revenues were
$592 million, up 15.6% year over year. Quarterly product gross
margin was 52.9% compared with 54.4% in the year-ago quarter.
Services gross margin was 38% compared with 36.5% in the year-ago
quarter.
Future Financial
Outlook
Motorola Solutions expects the
second quarter of 2013 revenues to remain the same or fall by 2%
year over year. EPS from continuing operations is expected in the
range of 66 cents to 71 cents.
For fiscal 2013, revenue is
expected to grow by 3% to 4% year over year while Non-GAAP
operating income is expected to be 18% of the total revenue.
Other Stocks Set for
Earnings Release
Some other companies in the same
sector, which are about to release their financial results are
Qualcomm Inc. (QCOM) and Harris
Corporation (HRS). Qualcomm will
report its second-quarter 2013 results on Apr 24 while Harris will
release its third-quarter 2013 results on Apr 30.
Recommendation
We believe that huge market share
for public safety products, recent acquisitions and continuous
order wins will consistently drive both the top and the bottom
lines of the company, going forward.
However, the company is heavily
dependent on government expenditures for its revenues.
Approximately 65% of the total sales of Motorola Solutions are from
government agencies. Therefore, we believe that a slowdown in the
government expenditures owing to budgetary pressures may
significantly jeopardize the company’s overall financials; hence
the company has also slashed its future growth outlook. Moreover,
Sprint Nextel Corp. (S) has planned to gradually
phase out of iDEN network, which may act as a major setback for the
company going forward.
Currently,Motorola SolutionsInc.has
a Zacks Rank #2 (Buy).
HARRIS CORP (HRS): Free Stock Analysis Report
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
QUALCOMM INC (QCOM): Free Stock Analysis Report
SPRINT NEXTEL (S): Free Stock Analysis Report
To read this article on Zacks.com click here.
Grafico Azioni Motorola Solutions (NYSE:MSI)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Motorola Solutions (NYSE:MSI)
Storico
Da Lug 2023 a Lug 2024