Summary
Motorola Solutions, Inc. reported strong performance for the nine months ended September 28, 2019, with a 7% increase in net sales to $2.0 billion for the third quarter and an 8% increase to $5.5 billion for the nine-month period compared to the prior year. This growth was driven by both the Products and Systems Integration segment (+5% Q3, +7% YTD) and the Services and Software segment (+12% Q3, +12% YTD), with notable contributions from acquisitions including WatchGuard, Avtec, and VaaS. Profitability saw significant improvement, with operating earnings increasing by 40% to $413 million in Q3 and 34% to $991 million year-to-date. This was supported by a higher gross margin of 50.5% in Q3 (up from 48.4% last year) and a reduction in "Other Charges" primarily due to the absence of a large environmental reserve expense recorded in the prior year. Diluted EPS also rose to $1.51 in Q3 ($3.56 YTD) from $1.43 ($3.17 YTD) in the prior year, reflecting the robust operational performance. The company continues to focus on strategic growth through acquisitions and returned capital to shareholders via share repurchases ($170 million YTD) and dividends ($281 million YTD). Financially, Motorola Solutions strengthened its balance sheet with strategic debt management, including the issuance of new convertible notes and repayment of existing debt, while maintaining a healthy operating cash flow of over $1 billion year-to-date.
Financial Highlights
55 data points| Revenue | $1.99B |
| Cost of Revenue | $987.00M |
| Gross Profit | $1.01B |
| R&D Expenses | $172.00M |
| SG&A Expenses | $359.00M |
| Operating Income | $413.00M |
| Interest Expense | $60.00M |
| Net Income | $267.00M |
| EPS (Basic) | $1.60 |
| EPS (Diluted) | $1.51 |
| Shares Outstanding (Basic) | 166.70M |
| Shares Outstanding (Diluted) | 176.40M |
Key Highlights
- 1Net sales increased by 7% to $2.0 billion in Q3 2019 and by 8% to $5.5 billion for the nine months ended September 28, 2019, compared to the prior year periods.
- 2Operating earnings grew significantly, up 40% to $413 million in Q3 and 34% to $991 million year-to-date, driven by higher gross margins and reduced "Other Charges."
- 3Diluted Earnings Per Share (EPS) increased to $1.51 in Q3 and $3.56 year-to-date, reflecting improved profitability.
- 4The Services and Software segment showed strong growth with net sales up 12% in Q3 and 12% year-to-date, outpacing the Products and Systems Integration segment.
- 5Acquisitions, including WatchGuard, Avtec, and VaaS, contributed positively to revenue growth, particularly in the Services and Software segment.
- 6Operating cash flow for the first nine months of 2019 was $1.03 billion, a substantial increase from $263 million in the prior year, indicating strong cash generation.
- 7The company actively managed its capital structure, including issuing $1.0 billion in new convertible notes and repurchasing $170 million of common stock and paying $281 million in dividends year-to-date.