Motorola Solutions, Inc. Quarterly Report for Q3 Ended Sep 28, 2013

Summary

Motorola Solutions, Inc. reported its third-quarter and year-to-date results for the period ending September 27, 2013. For the third quarter, the company saw a slight decrease in net sales of 2% year-over-year, totaling $2.1 billion, while diluted earnings per share increased significantly to $1.16 from $0.72 in the prior year quarter. This earnings improvement was largely driven by a lower effective tax rate and reduced pension expenses, despite a $44 million decrease in gross margin. For the nine-month period, net sales saw a 1% decrease to $6.2 billion. Diluted earnings per share from continuing operations increased to $2.77 from $1.80 in the comparable prior year period. The company continued its strong focus on returning capital to shareholders, repurchasing $1.3 billion in shares and paying $212 million in dividends during the first nine months of the year. The company also highlighted ongoing reorganization efforts aimed at improving operating margins and cost efficiencies, with an expectation of annualized cost savings.

Key Highlights

• 1Net sales decreased by 2% to $2.1 billion in Q3 2013 compared to Q3 2012.
• 2Diluted earnings per share increased significantly to $1.16 in Q3 2013 from $0.72 in Q3 2012.
• 3The effective tax rate was significantly lower in Q3 2013 (5%) compared to Q3 2012 (36%), partly due to tax benefits from foreign earnings.
• 4The Government segment's net sales decreased by 4% year-over-year, while the Enterprise segment saw a 2% increase.
• 5Motorola Solutions returned $1.5 billion to shareholders through share repurchases and dividends in the first nine months of 2013.
• 6The company continued its reorganization efforts, incurring $32 million in charges in Q3 2013 and expecting significant annualized cost savings from these initiatives.

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