Business Spending Props up Motorola Solutions

-4.11%
Downside
355
Market
340
Trefis
MSI: Motorola Solutions logo
MSI
Motorola Solutions

Motorola Solutions (NYSE:MSI) recently announced its Q2 earnings that showed strength its barcode scanners used by businesses, especially from retailers, transportation and logistics verticals. [1] Motorola Solutions, which competes with Cisco (NASDAQ:CSCO) and Honeywell International (NYSE:HON), makes products such as barcode scanners for retailers, and baggage tracking for airports to help them improve workforce productivity.

Our $42.50 price estimate for Motorola Solutions stock, which is in line with the market price.

Enterprise segment driving growth

The company’s commercial products segment for enterprises remained strong and segment’s sales increased by 11% in Q2 compared to the year ago quarter. [1] The company’s other segment that caters to government vertical showed slower growth possibly because of the recent spending cuts made by the government. We now expect Motorola Solutions to register $2.8 billion in revenues from the commercial segment alone in 2011.

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Winning new contracts from retailers and logistics companies

During the quarter, the company won new contracts from a few retailers such as Macy’s for its barcode scanning product. The management stated, “Macy’s recent deployment of MC3190-Z is a part of a continued company-wide upgrade of its mobile computing technology. We also won major contracts in mobile computing with a leading Russian retailer, a major supermarket in the Netherlands and 2 major retailers in France.:” [1]

The demand from transportation and logistics vertical also remained strong. Motorola recently renewed its contract with UPS, a package delivery company, to sell scanners used for tracking packages and couriers. [1]

See our complete analysis for Motorola Solutions

Notes:
  1. Motorola Solutions Q2 2011 earnings conference call transcript, SeekingAlpha, July 28th, 2011 [] [] [] []