Motorola Solutions (NYSE:MSI) will announce its Q3 results this Thursday. In the last quarter, the company got a boost from higher business spending that led to higher sales of bar-code scanners used by businesses, especially from retailers, transportation and logistics verticals (see Business Spending Props up Motorola Solutions). We expect the company to continue to benefit from higher business spending but the risk that investors should look out for is declining government spending and competition from CalAmp (NASDAQ: CAMP), Cisco (NASDAQ:CSCO) and Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC).
We maintain a $42.50 price estimate for Motorola Solutions stock, which is about 8% below market price.
Government spending cuts remain a risk
Currently, we have a forecast of increasing revenues from government security but in light of the recent federal budget, if you feel that the revenues might fall in the coming years, you may move the forecast down and check the effect on the stock price.
New Enterprise products to prop up sales
Motorola Solutions continues to come up with new products. A few days back, it introduced a 7-inch touchscreen tablet based on Google’s (NASDAQ:GOOG) Android OS that will initially be made available to retail and warehouse workers and then government customers. 
The company has a cash balance of $4.7 billion which it can use to fund the development of new products, possibly those that run on the faster 4G LTE network, both for the government and the enterprise market. We also expect to hear updates on any forthcoming product launches the company might have in store for the coming quarters.Notes:
- Federal Budget (Obama Jobs Bill, 2012 Budget), New York Times, October 12th, 2011 [↩]
- Motorola Solutions unveils rugged 7-in. Android tablet, ComputerWorld, Oct 2011 [↩]