Summary
Motorola Solutions, Inc. (MSI) reported its financial results for the second quarter and first half of 2013, showing a slight decrease in net sales compared to the prior year. For the three months ended June 29, 2013, net sales were $2.1 billion, down 2% from $2.1 billion in the same period of 2012. Diluted earnings per share from continuing operations were $0.94, a significant increase from $0.60 in the prior year, driven by improved profitability and a lower effective tax rate. For the six months ended June 29, 2013, net sales were $4.1 billion, a 1% decrease from $4.1 billion in the prior year, while diluted earnings per share from continuing operations rose to $1.62 from $1.09. The company saw a decrease in the Enterprise segment's net sales, primarily attributed to reduced IT hardware spending by customers and a decline in the iDEN product group. The Government segment experienced a slight dip in sales but showed an increase in operating earnings. Motorola Solutions continued its capital return strategy, repurchasing $907 million in stock and paying $143 million in dividends during the first half of the year, and announced an increase in its quarterly dividend. Key factors influencing the results include the impact of the Psion acquisition on the Enterprise segment's gross margins and R&D expenses, as well as ongoing reorganization charges aimed at improving long-term profitability. The company also highlighted the positive impact of tax benefits related to foreign tax credits from its reorganized non-U.S. subsidiaries, which significantly lowered its effective tax rate.
Financial Highlights
54 data points| Revenue | $1.50B |
| Cost of Revenue | $747.00M |
| Gross Profit | $750.00M |
| R&D Expenses | $195.00M |
| SG&A Expenses | $339.00M |
| Operating Income | $203.00M |
| Interest Expense | $38.00M |
| Net Income | $258.00M |
| EPS (Basic) | $0.96 |
| EPS (Diluted) | $0.94 |
| Shares Outstanding (Basic) | 269.50M |
| Shares Outstanding (Diluted) | 274.70M |
Key Highlights
- 1Net sales for the second quarter of 2013 were $2.1 billion, a 2% decrease year-over-year, while six-month sales were $4.1 billion, down 1%.
- 2Diluted earnings per share from continuing operations increased significantly to $0.94 for the quarter (vs. $0.60) and $1.62 for the six months (vs. $1.09), driven by operational improvements and tax benefits.
- 3The Enterprise segment experienced a 5% decline in net sales for both the quarter and the six-month period, impacted by reduced customer IT spending and a lower-margin product mix.
- 4The Government segment showed resilience with a 1% decrease in net sales for the quarter and a 1% increase for the six months, while operating earnings improved.
- 5Motorola Solutions actively returned capital to shareholders, repurchasing $907 million in stock and paying $143 million in dividends in the first half of 2013, and announced a dividend increase.
- 6The company recorded significant tax benefits, particularly from excess foreign tax credits related to reorganized non-U.S. subsidiaries, which substantially reduced its effective tax rate.
- 7Reorganization charges of $28 million for the quarter and $39 million for the six months were incurred as part of ongoing efforts to improve efficiency and reduce operating costs.