10-QPeriod: Q2 FY2012

Motorola Solutions, Inc. Quarterly Report for Q2 Ended Jun 30, 2012

Filed July 25, 2012For Securities:MSI

Summary

Motorola Solutions, Inc. reported solid financial results for the second quarter and the first half of 2012. Net sales increased by 8% year-over-year in the second quarter to $2.1 billion, driven by a significant 14% increase in the Government segment, which now represents a larger portion of overall sales. While the Enterprise segment saw a slight 2% decline in net sales, the company's overall revenue growth reflects a recovery and strong performance in its core public safety and government communications business. The company demonstrated improved profitability, with operating earnings rising to $278 million in Q2 2012 from $159 million in Q2 2011, resulting in a higher operating margin of 12.9%. Earnings from continuing operations per diluted share more than quadrupled to $0.60 from $0.14 year-over-year. Motorola Solutions also returned substantial capital to shareholders, repurchasing approximately $1.8 billion in stock during the first half of the year, and announced an increase in its quarterly dividend. Financially, the company maintained a healthy cash position and managed its debt effectively, including issuing new senior notes and redeeming existing ones.

Financial Highlights

54 data points
Beta

Revenue

$2.15B

49.3% Gross Margin

Net Income

$182.00M

8.5% Net Margin

EPS (Diluted)

$0.61

Total Assets

$12.19B

Cash & Equivalents

$1.77B

Free Cash Flow

$253.00M

Financial Statements
Beta
Revenue$2.15B
Cost of Revenue$1.09B
Gross Profit$1.06B
R&D Expenses$269.00M
SG&A Expenses$496.00M
Operating Income$278.00M
Interest Expense$25.00M
Net Income$182.00M
EPS (Basic)$0.63
EPS (Diluted)$0.61
Shares Outstanding (Basic)290.60M
Shares Outstanding (Diluted)296.10M

Key Highlights

  • 1Net sales increased by 8% to $2.1 billion in Q2 2012, driven by strong performance in the Government segment.
  • 2Operating earnings more than doubled to $278 million in Q2 2012, with operating margin improving to 12.9% from 8.0% in Q2 2011.
  • 3Earnings from continuing operations per diluted share surged to $0.60 in Q2 2012, up from $0.14 in Q2 2011.
  • 4The Government segment saw a 14% increase in net sales, while the Enterprise segment experienced a 2% decrease.
  • 5The company returned approximately $1.9 billion to shareholders through share repurchases and dividends in the first half of 2012.
  • 6Motorola Solutions issued $750 million in new senior notes and redeemed $400 million of existing notes, strengthening its debt profile.
  • 7The company announced a planned acquisition of Psion Plc. for approximately $200 million, aiming to bolster its mobile computing solutions.

Frequently Asked Questions

The primary driver of the 8% net sales growth to $2.1 billion in the second quarter of 2012 was the strong performance in the Government segment, which saw a 14% increase in net sales, driven by growth across all regions. This segment's increasing contribution to overall revenue highlights its importance to Motorola Solutions.

Motorola Solutions showed significant improvement in profitability. Operating earnings rose from $159 million in Q2 2011 to $278 million in Q2 2012, an increase of over 75%. The operating margin also improved considerably, expanding from 8.0% to 12.9% of net sales, reflecting better operational leverage and cost management.

Motorola Solutions is actively returning capital to shareholders. In the first half of 2012, the company repurchased approximately $1.8 billion of its common stock and paid $134 million in dividends. Furthermore, the company announced an increase in its quarterly dividend to $0.26 per share, signaling confidence in its financial stability and commitment to shareholder returns.

Yes, Motorola Solutions announced a recommended cash offer to acquire Psion Plc. for approximately $200 million. This acquisition is expected to be completed in the fourth quarter of 2012 and aims to enhance the company's capabilities in mobile computing solutions, further strengthening its Enterprise segment.