Summary
Motorola Solutions, Inc. reported its second quarter and first half 2014 financial results, showing a decline in net sales compared to the prior year. For the three months ended June 28, 2014, net sales were $1.39 billion, a 7% decrease from $1.50 billion in the same period of 2013. This decline was primarily driven by a 10% drop in the Products segment, with notable decreases in North America and APME. The Services segment saw a smaller 1% decrease. The company reported earnings from continuing operations of $78 million ($0.30 per diluted share) for the quarter, down significantly from $223 million ($0.81 per diluted share) in the prior year. This decrease was attributed to lower gross margins and a higher effective tax rate. However, the reported net earnings of $824 million ($3.22 per diluted share) were substantially boosted by a $746 million after-tax gain from discontinued operations, primarily due to a large tax benefit related to the pending sale of the Enterprise business to Zebra Technologies. For the six months ended June 28, 2014, net sales were $2.62 billion, a 9% decrease year-over-year. Earnings from continuing operations were $163 million ($0.63 per diluted share), compared to $380 million ($1.37 per diluted share) in the prior year. Net earnings for the six months were $951 million ($3.70 per diluted share), significantly influenced by the discontinued operations gain.
Financial Highlights
55 data points| Revenue | $1.39B |
| Cost of Revenue | $737.00M |
| Gross Profit | $656.00M |
| R&D Expenses | $176.00M |
| SG&A Expenses | $308.00M |
| Operating Income | $138.00M |
| Interest Expense | $34.00M |
| Net Income | $824.00M |
| EPS (Basic) | $3.25 |
| EPS (Diluted) | $3.22 |
| Shares Outstanding (Basic) | 253.70M |
| Shares Outstanding (Diluted) | 256.20M |
Key Highlights
- 1Net sales for Q2 2014 decreased 7% to $1.39 billion, driven by a 10% decline in the Products segment.
- 2Earnings from continuing operations for Q2 2014 were $78 million ($0.30/share), a sharp decrease from $223 million ($0.81/share) in Q2 2013.
- 3Net earnings for Q2 2014 were significantly boosted by a $746 million tax benefit related to discontinued operations, leading to reported net earnings of $824 million ($3.22/share).
- 4The company announced an agreement to sell its Enterprise business to Zebra Technologies for $3.45 billion, expecting to close by year-end 2014.
- 5Operating earnings for the Products segment decreased 24% in Q2 2014 compared to the prior year, while the Services segment's operating earnings fell 45%.
- 6Motorola Solutions returned $631 million to shareholders through share repurchases ($473 million) and dividends ($158 million) in the first half of 2014.
- 7The company refinanced its revolving credit facility, increasing its capacity to $2.0 billion.