Summary
Motorola Solutions, Inc. reported strong first-quarter 2018 results, with net sales increasing 15% year-over-year to $1.5 billion, driven by solid demand in both its Products and Services segments across all regions. The company completed two significant acquisitions during the quarter: Avigilon Corporation for $974 million and Plant Holdings, Inc. for $237 million, which are expected to enhance its security and surveillance and command center software portfolios, respectively. Despite an increase in operating expenses, including acquisition-related costs and higher R&D, net earnings attributable to Motorola Solutions, Inc. grew to $117 million, or $0.69 per diluted share, compared to $77 million, or $0.45 per diluted share, in the prior year. This improvement was significantly aided by a lower effective tax rate due to the U.S. Tax Cuts and Jobs Act. Key financial activities during the quarter included a substantial use of cash for operating activities, primarily due to a $500 million contribution to the company's U.S. pension plan. The company also returned $150 million to shareholders through dividends and share repurchases. Motorola Solutions ended the quarter with a strong liquidity position, though cash and cash equivalents decreased due to operational and investing activities. The company continues to repurchase shares under its authorized program, with $1.6 billion remaining. Investors should note the impact of adopting the new revenue recognition standard (ASC 606), which influenced the presentation of contract assets and liabilities, and accelerated some revenue recognition. While acquisitions contributed to sales growth, they also increased operating expenses and goodwill on the balance sheet. The company's effective tax rate is expected to remain lower due to the recent tax reforms.
Financial Highlights
55 data points| Revenue | $1.47B |
| Cost of Revenue | $799.00M |
| Gross Profit | $669.00M |
| R&D Expenses | $152.00M |
| SG&A Expenses | $279.00M |
| Operating Income | $171.00M |
| Interest Expense | $54.00M |
| Net Income | $117.00M |
| EPS (Basic) | $0.73 |
| EPS (Diluted) | $0.69 |
| Shares Outstanding (Basic) | 161.40M |
| Shares Outstanding (Diluted) | 170.60M |
Key Highlights
- 1Net sales increased 15% year-over-year to $1.47 billion, driven by growth in both Products and Services segments.
- 2Completed two strategic acquisitions: Avigilon Corporation for $974 million and Plant Holdings, Inc. for $237 million, expanding security and command center software capabilities.
- 3Net earnings attributable to Motorola Solutions, Inc. rose to $117 million ($0.69 per diluted share) from $77 million ($0.45 per diluted share) in the prior year.
- 4Effective tax rate decreased significantly to 16% in Q1 2018 from 35% in Q1 2017, largely due to the U.S. Tax Cuts and Jobs Act.
- 5Operating cash flow was negative $500 million, primarily impacted by a $500 million contribution to the U.S. pension plan.
- 6Investments in acquisitions totaled $1.1 billion, while capital expenditures were $41 million.
- 7Returned $150 million to shareholders via dividends ($84 million) and share repurchases ($66 million) during the quarter.