Summary
Motorola Solutions, Inc. reported strong performance for the first quarter of 2011, with net sales increasing by 8% year-over-year to $1.9 billion. This growth was driven by a 14% increase in the Enterprise segment and a 5% increase in the Government segment. Operating earnings saw a significant improvement, rising to $170 million from $120 million in the prior year, leading to an improved operating margin of 9.0%.
Financial Highlights
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Financial Statements
Beta
| Revenue | $1.83B |
| Cost of Revenue | $910.00M |
| Gross Profit | $924.00M |
| R&D Expenses | $239.00M |
| SG&A Expenses | $461.00M |
| Operating Income | $169.00M |
| Interest Expense | $34.00M |
| Net Income | $497.00M |
| EPS (Basic) | $1.47 |
| EPS (Diluted) | $1.44 |
| Shares Outstanding (Basic) | 337.40M |
| Shares Outstanding (Diluted) | 344.20M |
Key Highlights
- 1Net sales increased 8% to $1.9 billion, driven by growth in both Enterprise (+14%) and Government (+5%) segments.
- 2Operating earnings grew to $170 million, with operating margin expanding to 9.0% from 6.9% in the prior year.
- 3Earnings from continuing operations were $365 million, or $1.06 per diluted share, a substantial increase from $97 million, or $0.29 per diluted share, in Q1 2010.
- 4A significant tax benefit of $244 million from the reversal of a valuation allowance on U.S. deferred tax assets contributed to the net earnings increase.
- 5Cash flow from operations improved significantly, reaching $231 million compared to $59 million in the prior year.
- 6The company completed the sale of its Networks business to Nokia Siemens Networks on April 29, 2011, and continues to focus on mission-critical communication solutions.
- 7The company terminated its previous credit facility and entered into a new $1.5 billion unsecured syndicated revolving credit facility maturing in June 2014.
Frequently Asked Questions
The revenue increase of 8% to $1.9 billion was primarily driven by a 14% increase in the Enterprise segment, fueled by growth in mobile computing, scanning devices, and iDEN sales, and a 5% increase in the Government segment, largely due to higher radio sales.
The company completed the distribution of Motorola Mobility Holdings, Inc. in January 2011 and announced the amended agreement to sell its Networks business to Nokia Siemens Networks, which closed shortly after the quarter end on April 29, 2011. A significant factor in the earnings improvement was a $244 million tax benefit from reversing a valuation allowance on U.S. deferred tax assets.
Cash flow from operating activities saw a substantial improvement, generating $231 million in Q1 2011 compared to $59 million in Q1 2010. This improvement was mainly due to higher income from continuing operations and a decrease in accounts receivable, partially offset by a decrease in accounts payable and accrued liabilities.
The company sees resilience in its Government segment despite challenging U.S. government budgets, with customers prioritizing public safety needs. The Enterprise segment shows sustained momentum with growth driven by retail investment. The company is also investing in next-generation public safety broadband networks based on LTE. However, disruptions in the supply chain due to events in Japan are expected to cause some impact in the second quarter.