10-Q/APeriod: Q3 FY2003

Motorola Solutions, Inc. Quarterly Report (Amendment) for Q3 Ended Sep 27, 2003

Filed March 8, 2004For Securities:MSI

Summary

This filing is an amendment to Motorola Solutions, Inc.'s (MSI) 10-Q report for the period ending September 26, 2003, filed on March 8, 2004. It primarily focuses on updates to the Management's Discussion and Analysis (MD&A) and Controls and Procedures sections. The amendment does not restate the previously reported financial statements. For the nine months ended September 27, 2003, MSI reported net sales of $19.0 billion, a 3% decrease compared to the prior year. However, the company achieved net earnings of $404 million, a significant turnaround from a net loss of $2.7 billion in the same period of 2002. This improvement was largely driven by the absence of substantial charges experienced in the prior year, including large reorganization and impairment charges. The Personal Communications segment remains the largest contributor to net sales, though it experienced a slight decline in sales for the nine-month period, offset by an increase in operating earnings driven by fewer charges. The Commercial, Government and Industrial Solutions segment showed robust growth in both sales and operating earnings, benefiting from homeland security initiatives. The Semiconductor Products segment, however, continued to face challenges with declining sales and operating losses. MSI is actively managing its costs and has implemented reorganization plans aimed at future cost savings. The company ended the period with a strong cash position of $7.1 billion.

Key Highlights

  • 1For the nine months ended September 27, 2003, net sales were $19.0 billion, a 3% decrease year-over-year, primarily due to declines in Broadband Communications, Global Telecom Solutions, and Semiconductor Products segments, partially offset by growth in Commercial, Government and Industrial Solutions.
  • 2Net earnings for the nine months ended September 27, 2003, were $404 million ($0.17 per share), a substantial improvement from a net loss of $2.7 billion ($1.17 per share) in the prior year, mainly due to the absence of significant charges and impairments recorded in 2002.
  • 3The Personal Communications segment, the largest revenue generator, saw an 8% increase in sales for Q3 2003 but a 1% decrease for the nine months, with operating earnings improving due to fewer charges compared to the prior year.
  • 4The Commercial, Government and Industrial Solutions segment demonstrated strong performance with a 17% sales increase in Q3 and a 12% increase for the nine months, driven by homeland security initiatives, leading to significant operating earnings growth.
  • 5The Semiconductor Products segment reported a net sales decrease of 4% in Q3 and 5% for the nine months, and continued to incur operating losses, though the loss for the nine months was significantly reduced year-over-year due to fewer charges.
  • 6Motorola Solutions maintained a strong liquidity position with cash and cash equivalents of $7.1 billion as of September 27, 2003.
  • 7The company is undergoing significant restructuring, with reorganization charges impacting results in various segments, but these plans are expected to yield substantial annualized cost savings.

Frequently Asked Questions

This filing is an Amendment No. 1 to Motorola Solutions, Inc.'s (MSI) Form 10-Q for the period ended September 27, 2003. It primarily serves to amend and present the complete text of 'Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations' and 'Item 4: Controls and Procedures'. It does not amend or restate the previously reported financial statements.

For the nine months ended September 27, 2003, Motorola Solutions reported net sales of $19.0 billion, a 3% decrease from $19.6 billion in the prior year. However, net earnings were $404 million, a substantial improvement from a net loss of $2.7 billion in the comparable period of 2002. This turnaround was largely attributed to the absence of significant charges and impairments that impacted the prior year's results.

The Personal Communications segment, though facing increased competition, saw its operating earnings improve due to fewer restructuring charges compared to the prior year. The Commercial, Government and Industrial Solutions segment showed strong growth in sales and operating earnings, benefiting from increased government spending related to homeland security. Conversely, the Semiconductor Products segment continued to experience declining sales and operating losses, although the loss was reduced compared to the previous year.

Motorola Solutions ended the period with a strong cash position, reporting $7.1 billion in cash and cash equivalents as of September 27, 2003. The company expects positive operating cash flow for the fourth quarter and the full year 2003, and believes it has adequate resources to fund its working capital and capital expenditure requirements for the next twelve months.