10-QPeriod: Q2 FY2017

Motorola Solutions, Inc. Quarterly Report for Q2 Ended Apr 1, 2017

Filed May 5, 2017For Securities:MSI

Summary

Motorola Solutions, Inc. (MSI) reported solid financial results for the first quarter of 2017, demonstrating significant year-over-year improvement. Net sales increased by 7% to $1.3 billion, driven by a robust 18% growth in the Services segment, largely attributed to the acquisition of Airwave. The Products segment remained stable. Profitability saw a substantial boost, with operating earnings nearly doubling to $176 million, reflecting improved gross margins and effective cost management. This translated into a significant increase in net earnings attributable to common shareholders, which grew to $77 million ($0.45 per diluted share) from $17 million ($0.10 per diluted share) in the prior year's quarter. The company also generated strong operating cash flow of $142 million, a marked improvement from the previous year, and continued to return capital to shareholders through dividends and share repurchases.

Financial Highlights

55 data points
Beta

Revenue

$1.28B

44.5% Gross Margin

Net Income

$77.00M

6.0% Net Margin

EPS (Diluted)

$0.45

Total Assets

$8.14B

Cash & Equivalents

$766.00M

Free Cash Flow

$142.00M

Financial Statements
Beta
Revenue$1.28B
Cost of Revenue$711.00M
Gross Profit$570.00M
R&D Expenses$135.00M
SG&A Expenses$244.00M
Operating Income$173.00M
Interest Expense$54.00M
Net Income$77.00M
EPS (Basic)$0.47
EPS (Diluted)$0.45
Shares Outstanding (Basic)164.20M
Shares Outstanding (Diluted)169.90M

Key Highlights

  • 1Net sales increased by 7% year-over-year to $1.3 billion, driven by strong Services segment growth.
  • 2Services segment revenue grew by 18%, significantly boosted by the Airwave acquisition and organic growth.
  • 3Operating earnings more than doubled year-over-year to $176 million, with operating margin expanding to 13.7% from 8.4%.
  • 4Net earnings attributable to Motorola Solutions, Inc. shareholders surged to $77 million ($0.45 per diluted share) from $17 million ($0.10 per diluted share) in the prior year.
  • 5Operating cash flow improved dramatically to $142 million from $13 million in the same period last year.
  • 6The company returned $255 million to shareholders via dividends and share repurchases.
  • 7Motorola Solutions announced its intention to acquire Kodiak Networks to further build its software portfolio.

Frequently Asked Questions

Motorola Solutions showed significant improvement in Q1 2017 compared to Q1 2016. Net sales grew by 7% to $1.3 billion. Operating earnings more than doubled to $176 million, and net earnings attributable to the company's shareholders increased substantially to $77 million ($0.45 per diluted share) from $17 million ($0.10 per diluted share).

The primary driver of revenue growth was the Services segment, which saw an 18% increase primarily due to the acquisition of Airwave and organic growth in Managed & Support services. The Products segment remained relatively flat.

The company demonstrated improved profitability through higher gross margins, particularly in the Services segment due to the Airwave acquisition's higher historical margins. Selling, general, and administrative expenses (SG&A) saw a slight decrease, reflecting cost-saving initiatives. This resulted in a significant expansion of the operating margin from 8.4% to 13.7%.

Motorola Solutions generated strong operating cash flow of $142 million in Q1 2017, a significant improvement from the prior year. The company also returned $255 million to shareholders through dividends and share repurchases, indicating a focus on returning value to investors while managing operations effectively.