Summary
Motorola Solutions, Inc. (MSI) reported first-quarter 2013 results showing modest revenue growth, with a 1% increase year-over-year to $1.97 billion. This growth was primarily driven by the Government segment, which saw a 3% increase in net sales, offsetting a 4% decline in the Enterprise segment. Net earnings attributable to common stockholders increased to $192 million, or $0.68 per diluted share, up from $159 million, or $0.50 per diluted share, in the prior year's quarter. This improvement was significantly aided by a substantially lower effective tax rate, a decrease in pension expenses, and a reduction in outstanding shares due to ongoing share repurchases. The company maintained a strong liquidity position with $1.5 billion in cash and cash equivalents and $2.2 billion in Sigma Fund investments. Management returned $429 million to shareholders through share repurchases and dividends, indicating a focus on capital return. Financially, MSI issued $600 million in senior notes, strengthening its debt profile. While the overall results show positive trends in profitability and shareholder returns, investors should note the decline in the Enterprise segment and carefully monitor the integration of the Psion acquisition and its impact on margins.
Financial Highlights
55 data points| Revenue | $1.40B |
| Cost of Revenue | $703.00M |
| Gross Profit | $693.00M |
| R&D Expenses | $187.00M |
| SG&A Expenses | $325.00M |
| Operating Income | $174.00M |
| Interest Expense | $30.00M |
| Net Income | $192.00M |
| EPS (Basic) | $0.70 |
| EPS (Diluted) | $0.68 |
| Shares Outstanding (Basic) | 274.50M |
| Shares Outstanding (Diluted) | 280.70M |
Key Highlights
- 1Net sales increased by 1% to $1.97 billion, driven by a 3% rise in the Government segment, which compensated for a 4% decline in the Enterprise segment.
- 2Net earnings attributable to common stockholders rose to $192 million ($0.68 per diluted share) from $159 million ($0.50 per diluted share) in the prior year, largely due to a lower effective tax rate and share repurchases.
- 3Gross margin percentage declined to 48.4% from 49.7%, primarily due to the Enterprise segment's performance, including lower-margin iDEN sales and the impact of the Psion acquisition.
- 4Selling, General, and Administrative (SG&A) expenses decreased by 3% to $460 million, partly due to lower pension expense.
- 5Research and Development (R&D) expenditures increased by 3% to $262 million, primarily attributed to the Psion acquisition.
- 6The company returned $429 million to shareholders through share repurchases ($357 million) and dividends ($72 million) in the first quarter.
- 7Motorola Solutions issued $600 million in 3.500% Senior Notes due 2023, bolstering its long-term debt structure.