01—Abstract
Summary
Summary of the 10-K filed February 21, 2017. Cited figures are marked; the original filing is the authoritative source.
Motorola Solutions, Inc. (MSI) reported net sales of $6.04 billiona for the fiscal year ended December 30, 2016, a 6% increase from $5.7 billion in 2015.
This growth was primarily driven by strong performance in the Services segment, bolstered by the significant acquisition of Guardian Digital Communications Limited (GDCL) for approximately $1 billionb, which expanded their Managed & Support services. The Products segment saw a slight decline in net sales, though operating margins improved.
The company generated $1.2 billionc in operating cash flow, an increase from the prior year, and returned $1.1 billion to shareholders through $842 million in share repurchases and $280 million in dividends. MSI continues to invest in future growth areas, particularly in software solutions for command centers and next-generation public safety broadband networks based on LTE technology, indicating a strategic shift towards a more services and software-centric business model.
02—Key points
Key Highlights
- Net sales increased by 6% to $6.04 billion in 2016, up from $5.7 billion in 2015, driven by growth in the Services segment.
- The acquisition of Guardian Digital Communications Limited (GDCL) for approximately $1 billion significantly boosted the Services segment, particularly Managed & Support services.
- Operating earnings increased to $1.07 billion in 2016 from $994 million in 2015, reflecting improved operational efficiencies.
- Motorola Solutions returned $1.1 billion in capital to shareholders through share repurchases ($842 million) and dividends ($280 million).
- Operating cash flow strengthened to $1.2 billion in 2016, up from $1.0 billion in 2015.
- The company is strategically investing in software solutions for command centers and next-generation public safety broadband (LTE) to drive future growth.
- Backlog grew to a record $8.4 billion at the end of 2016, up 29% from the previous year, indicating strong future revenue potential.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Motorola Solutions, Inc. kept $0.09.
- Revenue$6.04B100.0%
- Cost of revenue−$3.17B52.5%
- Gross profit$2.87B47.5%
- Operating costs−$1.82B30.2%
- Operating income$1.05B17.4%
- Interest, other & tax−$488.0M8.1%
- Net income$560.0M9.3%
Where FY2016 revenue went
$6.04B- Cost of revenue: $3.17B, 52% of revenue
- SG&A: $1.04B, 17% of revenue
- Net income: $560.0M, 9.3% of revenue
- R&D: $553.0M, 9.2% of revenue
- Other operating costs: $224.0M, 3.7% of revenue
- Interest, other & tax: $488.0M, 8.1% of revenue
Kept 9.3% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 21, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $6.04B$5.70B | +6.0% |
| Cost of Revenue | $3.17B$2.98B | +6.5% |
| Gross Profit | $2.87B$2.72B | +5.5% |
| R&D Expenses | $553.00M$620.00M | −10.8% |
| SG&A Expenses | $1.04B$1.02B | +2.3% |
| Operating Income | $1.05B$994.00M | +5.4% |
| Interest Expense | $225.00M$186.00M | +21.0% |
| Net Income | $560.00M$610.00M | −8.2% |
| EPS (Basic) | $3.30$3.06 | +7.8% |
| EPS (Diluted) | $3.24$3.02 | +7.3% |
| Shares Outstanding (Basic) | 169.60M199.60M | −15.0% |
| Shares Outstanding (Diluted) | 173.10M201.80M | −14.2% |
05—Questions
Frequently Asked Questions
What was Motorola Solutions' revenue growth in 2016 and what drove it?
Motorola Solutions reported net sales of $6.04 billion for the fiscal year ended December 30, 2016, representing a 6% increase from $5.7 billion in 2015. This growth was primarily driven by the Services segment, significantly boosted by the acquisition of Guardian Digital Communications Limited (GDCL), and organic growth in North America and Asia Pacific within both Products and Services.
How did the company manage its capital and return value to shareholders in 2016?
In 2016, Motorola Solutions generated $1.2 billion in operating cash flow and returned a total of $1.1 billion to shareholders. This consisted of $842 million through its share repurchase program and $280 million in dividends. The company also increased its quarterly dividend by 15% to $0.47 per share in November 2016.
What are Motorola Solutions' key strategic priorities for future growth?
The company's strategic priorities include expanding its Services portfolio, particularly Managed & Support services, and investing in software solutions for command centers. A key focus is also the development and deployment of next-generation public safety broadband solutions utilizing LTE technology, aiming to leverage its expertise in both public and private networks to meet evolving customer needs.
How did acquisitions impact the company's financial performance in 2016?
Motorola Solutions completed two significant acquisitions in 2016: Guardian Digital Communications Limited (GDCL) for approximately $1 billion, which significantly enhanced its Services segment, and Spillman Technologies for $217 million, expanding its Command Center software capabilities. These acquisitions contributed to the company's revenue growth and strategic shift towards software and services.
06—Continue