Motorola Solutions, Inc. Quarterly Report for Q2 Ended Apr 3, 2010

Summary

Motorola, Inc. reported a net earning of $69 million for the first quarter of 2010, a significant turnaround from a net loss of $231 million in the same period of 2009. This improvement was driven by a substantial increase in gross margin, primarily due to favorable product mix in the Mobile Devices segment and cost reduction initiatives across various segments. Revenue for the quarter was $5.0 billion, a 6% decrease year-over-year, impacted by declines in the Home and Mobile Devices segments, partially offset by growth in Enterprise Mobility Solutions. The company continues to prepare for its planned separation into two independent publicly traded companies, targeting completion in the first quarter of 2011. This strategic move aims to unlock value by creating more focused entities. Management highlighted increased operating cash flow of $485 million, a significant improvement from the prior year, underscoring operational efficiency gains and improved working capital management.

Key Highlights

• 1Net earnings of $69 million, a significant improvement from a net loss of $231 million in Q1 2009.
• 2Revenue of $5.0 billion, down 6% year-over-year, with mixed segment performance.
• 3Gross margin improved to 35.4% from 27.9% in the prior year, driven by product mix and cost efficiencies.
• 4Operating cash flow was positive at $485 million, a substantial increase from negative $1.0 billion in Q1 2009.
• 5Company is on track for its planned separation into two independent companies in Q1 2011.
• 6Mobile Devices segment saw a 9% revenue decline but an improved operating loss due to higher ASP and cost controls.
• 7Enterprise Mobility Solutions segment reported a 6% increase in revenue and a 114% increase in operating earnings.

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