Summary
Motorola Solutions, Inc. (MSI) reported a strong second quarter and first half of 2018, demonstrating robust revenue growth and improved profitability. Net sales for the second quarter increased by 18% year-over-year to $1.8 billion, driven by solid demand across its global operations. For the first half of the year, net sales grew by 16% to $3.2 billion. This growth was significantly fueled by strategic acquisitions, particularly Avigilon and Plant, which contributed substantially to the expansion of the Services and Software segment. Profitability also saw a notable increase, with net earnings attributable to Motorola Solutions, Inc. rising to $180 million ($1.05 per diluted share) in Q2 2018, up from $131 million ($0.78 per diluted share) in Q2 2017. The company benefited from improved gross margins, favorable foreign currency rates, and the adoption of new accounting standards (ASC 606). Despite an increase in operating expenses related to acquisitions and the adoption of ASC 606, overall financial performance remained strong. The company also continues to actively manage its capital structure, returning value to shareholders through dividends and share repurchases, while maintaining a healthy liquidity position.
Financial Highlights
54 data points| Revenue | $1.76B |
| Cost of Revenue | $938.00M |
| Gross Profit | $822.00M |
| R&D Expenses | $162.00M |
| SG&A Expenses | $316.00M |
| Operating Income | $273.00M |
| Interest Expense | $63.00M |
| Net Income | $180.00M |
| EPS (Basic) | $1.11 |
| EPS (Diluted) | $1.05 |
| Shares Outstanding (Basic) | 162.20M |
| Shares Outstanding (Diluted) | 171.70M |
Key Highlights
- 1Net sales increased by 18% to $1.8 billion in Q2 2018 and by 16% to $3.2 billion in the first half of 2018, driven by strong global demand and strategic acquisitions.
- 2Net earnings attributable to Motorola Solutions, Inc. rose to $180 million ($1.05 per diluted share) in Q2 2018, compared to $131 million ($0.78 per diluted share) in Q2 2017, reflecting improved profitability.
- 3The Services and Software segment showed significant growth, with net sales increasing by 27% in Q2 2018, boosted by acquisitions like Plant and Kodiak Networks.
- 4Gross margin improved to 46.7% of net sales in Q2 2018 from 46.1% in Q2 2017, attributed to better margins in services, ASC 606 adoption, and favorable mix.
- 5The company repurchased approximately 0.6 million shares for $66 million during the first half of 2018 and paid $168 million in dividends, demonstrating commitment to returning capital to shareholders.
- 6Motorola Solutions completed the acquisition of Avigilon Corporation for $974 million, a move expected to enhance its security and surveillance solutions portfolio.
- 7The effective tax rate decreased significantly to 20% in Q2 2018 and 19% for the first half of 2018, primarily due to the U.S. Tax Cuts and Jobs Act.