What were the key drivers of Motorola Solutions' revenue growth in Q3 2017?

Revenue growth was driven by strong demand across both the Products and Services segments globally. Specifically, the Products segment saw increases in both Devices and Systems sales, while the Services segment benefited from acquisitions (Interexport, Spillman Technologies, Kodiak Networks) and growth in Managed & Support and Integration services.

How is Motorola Solutions managing its capital and returning value to shareholders?

Motorola Solutions actively manages its capital through share repurchases and dividend payments. In the first nine months of 2017, the company returned $588 million to shareholders through these methods. As of September 30, 2017, the company had $1.8 billion of remaining authority under its $14.0 billion share repurchase program.

What is the outlook for the Services segment?

The Services segment is a strategic focus for Motorola Solutions, growing faster than the Products segment. The company expects continued revenue growth in Services, driven by Managed & Support services and software solutions, which contribute to operating margin expansion despite generally lower gross margins compared to the Products segment.

Are there any significant upcoming accounting changes that investors should be aware of?

Motorola Solutions is preparing to adopt new accounting standards. Notably, ASC 606, 'Revenue from Contracts with Customers,' effective January 1, 2018, which may impact revenue recognition timing for certain contracts, particularly those involving devices and accessories. Additionally, ASC 842, 'Leases,' effective January 1, 2019, will require lessees to recognize lease assets and liabilities on the balance sheet.

MSI 10-Q Filed Nov 3, 2017

Summary

Motorola Solutions, Inc. (MSI) reported a solid third quarter in 2017, with net sales increasing by 7% year-over-year to $1.6 billion. This growth was driven by strong performance in both the Products and Services segments, with net sales up 8% and 7% respectively. The company achieved net earnings attributable to Motorola Solutions, Inc. of $212 million, or $1.25 per diluted share, an increase from the prior year's $192 million, or $1.13 per diluted share. This improvement in earnings per share was supported by higher net sales and a reduction in outstanding shares due to the ongoing share repurchase program. Operationally, MSI is focusing on growing its Services segment, which includes Managed & Support services and software solutions, as this segment generally experiences faster revenue growth than the Products segment. The company also continues to invest in software through internal development and strategic acquisitions to meet increasing customer demand for advanced technology solutions. MSI ended the quarter with a strong liquidity position, with $717 million in cash and cash equivalents, and substantial availability under its credit facilities.

Key Highlights

1Net sales increased by 7% to $1.6 billion in Q3 2017 compared to Q3 2016, driven by growth in both Products (up 8%) and Services (up 7%) segments.
2Diluted earnings per share rose to $1.25 from $1.13 year-over-year, reflecting higher net sales and a reduced share count from repurchases.
3The company generated $585 million in net cash from operating activities for the first nine months of 2017.
4Motorola Solutions returned $588 million to shareholders through dividends and share repurchases in the first nine months of 2017.
5The Services segment continues to be a growth driver, with revenue increasing 9% year-to-date, supported by acquisitions and growth in Managed & Support services.
6The company announced its intention to acquire Plant Holdings, Inc., parent of Airbus DS Communications, to expand its Command Center software portfolio.
7Goodwill increased significantly during the period due to acquisitions, notably Kodiak Networks, Interexport, and Spillman Technologies, Inc.

Motorola Solutions, Inc. Quarterly Report for Q3 Ended Sep 30, 2017

Summary

Key Highlights

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