10-QPeriod: Q3 FY2011

Motorola Solutions, Inc. Quarterly Report for Q3 Ended Oct 1, 2011

Filed October 27, 2011For Securities:MSI

Summary

Motorola Solutions, Inc. (MSI) reported solid financial results for the third quarter and first nine months of fiscal year 2011, demonstrating a significant rebound from the prior year's performance. The company saw a substantial increase in net sales, driven by growth in both its Government and Enterprise segments. This top-line growth translated into improved operating earnings and profitability from continuing operations, signaling effective execution of its business strategies post-spin-off of Motorola Mobility. Key financial maneuvers included a substantial share repurchase program and the initiation of a quarterly dividend, underscoring a commitment to returning value to shareholders. The company also continued to streamline its operations through the divestiture of non-core businesses, such as the Wireless Broadband businesses and the recently completed sale of its Networks business to Nokia Siemens Networks. These strategic actions appear to be strengthening the company's focus and financial position.

Key Highlights

  • 1Net sales increased by 10% year-over-year to $2.1 billion for the third quarter of 2011, and by 9% to $6.0 billion for the first nine months.
  • 2Earnings from continuing operations, net of tax, were $152 million ($0.45 per diluted share) for Q3 2011, a significant improvement from a loss of $13 million ($0.04 per diluted share) in Q3 2010.
  • 3The company repurchased $744 million of its common stock during the third quarter of 2011 under a newly authorized $2.0 billion share repurchase program.
  • 4Motorola Solutions initiated a quarterly cash dividend of $0.22 per share, with the first payment made in October 2011.
  • 5The Government segment reported a 9% increase in net sales for Q3 2011, and the Enterprise segment saw a 13% increase, indicating broad-based growth.
  • 6Operating earnings for continuing operations increased by 20% to $253 million in Q3 2011.
  • 7The company completed the sale of its Networks business to Nokia Siemens Networks and reported the Wireless Broadband businesses as discontinued operations.
  • 8Cash flow from operating activities from continuing operations was strong, generating $803 million for the first nine months of 2011, up from $471 million in the prior year.

Frequently Asked Questions

Motorola Solutions showed significant improvement. For the third quarter of 2011, net sales increased by 10% to $2.1 billion, and the company reported earnings from continuing operations of $152 million ($0.45 per diluted share), a substantial rebound from a net loss of $13 million ($0.04 per diluted share) in the third quarter of 2010. For the first nine months, net sales grew 9% to $6.0 billion, and earnings from continuing operations reached $567 million ($1.65 per diluted share), compared to $78 million ($0.23 per diluted share) in the prior year.

The company completed the sale of its Networks business to Nokia Siemens Networks and reported its Wireless Broadband businesses as discontinued operations, indicating a focus on core segments. Additionally, Motorola Solutions announced and began executing a $2.0 billion share repurchase program and initiated its first quarterly dividend, signaling a commitment to shareholder returns.

Both segments demonstrated strong growth. The Government segment's net sales increased by 9% year-over-year in the third quarter, while the Enterprise segment saw a 13% increase. This robust performance in both core areas contributed significantly to the company's overall revenue growth and improved profitability.

Motorola Solutions generated strong operating cash flow from continuing operations, with $803 million for the first nine months of 2011, a significant increase from $471 million in the same period last year. The company also utilized its capital by repurchasing $744 million in stock during the third quarter and initiating dividend payments, while also managing debt levels.