10-QPeriod: Q3 FY2011

Motorola Solutions, Inc. Quarterly Report for Q3 Ended Jul 2, 2011

Filed July 28, 2011For Securities:MSI

Summary

Motorola Solutions, Inc. (MSI) reported strong financial performance for the second quarter of 2011, with net sales increasing by 6% year-over-year to $2.1 billion. This growth was driven by an 11% increase in the Enterprise segment and a 4% increase in the Government segment. The company achieved operating earnings of $170 million, maintaining an operating margin of 8.3%. Significant events during the period included the completion of the Networks business sale to Nokia Siemens Networks, which resulted in a substantial pre-tax gain of $488 million recognized in discontinued operations. The company also successfully completed the distribution of Motorola Mobility Holdings, Inc. in January 2011. Following these strategic separations, Motorola Solutions is focused on its two core segments: Government and Enterprise. Financially, MSI generated robust operating cash flow of $333 million in the first half of 2011. The company ended the quarter with $2.2 billion in cash and cash equivalents. Notably, on July 28, 2011, the company announced a $2.0 billion share repurchase program and the initiation of a quarterly cash dividend, signaling a commitment to returning value to shareholders.

Financial Highlights

54 data points
Beta

Revenue

$1.98B

50.8% Gross Margin

Net Income

$349.00M

17.6% Net Margin

EPS (Diluted)

$1.00

Total Assets

$15.60B

Cash & Equivalents

$2.20B

Free Cash Flow

$94.00M

Financial Statements
Beta
Revenue$1.98B
Cost of Revenue$977.00M
Gross Profit$1.01B
R&D Expenses$260.00M
SG&A Expenses$482.00M
Operating Income$159.00M
Interest Expense$40.00M
Net Income$349.00M
EPS (Basic)$1.02
EPS (Diluted)$1.00
Shares Outstanding (Basic)341.20M
Shares Outstanding (Diluted)348.50M

Key Highlights

  • 1Net sales grew 6% to $2.1 billion in Q2 2011, driven by strong performance in both Government and Enterprise segments.
  • 2Operating earnings were $170 million, with operating margin holding steady at 8.3%.
  • 3Completed the sale of the Networks business, recognizing a significant pre-tax gain of $488 million in discontinued operations.
  • 4Generated strong operating cash flow of $333 million in the first half of 2011.
  • 5Ended the quarter with a healthy cash balance of $2.2 billion.
  • 6Announced a $2.0 billion share repurchase program and initiated a quarterly cash dividend, demonstrating a focus on shareholder returns.
  • 7Enterprise segment sales increased 11% year-over-year, highlighting strong demand for its products and services.

Frequently Asked Questions

Motorola Solutions reported a 6% increase in net sales to $2.1 billion for the second quarter of 2011 compared to the same period in 2010. Operating earnings were $170 million, with operating margins remaining stable at 8.3%. Earnings from continuing operations were $58 million, or $0.17 per diluted share, a significant improvement from $3 million, or $0.01 per diluted share, in the prior year.

The company completed two major strategic transactions: the sale of its Networks business to Nokia Siemens Networks and the distribution of its Motorola Mobility Holdings, Inc. stock to shareholders. Following these actions, Motorola Solutions is now focused on its Government and Enterprise segments.

Motorola Solutions generated $333 million in cash from operating activities in the first half of 2011, an increase from $162 million in the same period of 2010. The company ended the quarter with $2.2 billion in cash and cash equivalents, down from $4.2 billion at the end of 2010, largely due to the $3.2 billion cash contribution to Motorola Mobility prior to its distribution.

The company expressed optimism about continued growth in its Government segment despite challenging budget environments, and sustained momentum in its Enterprise segment driven by retail investments. Notably, on July 28, 2011, the company announced a $2.0 billion share repurchase program and the initiation of a quarterly cash dividend of $0.22 per share, signaling a commitment to enhancing shareholder value.