Motorola Solutions: Earnings Beat Raises Q4 Expectations
Motorola Solutions’ revenues and earnings per share increased significantly in Q3, driven by incremental revenues from Airwave Solutions, continued cost discipline and share buybacks that shored up earnings per share. The results were ahead of market expectations. Following the earnings announcement, the company provided guidance for the fourth quarter with revenue growth in the range of 9%-10% and EPS at $1.82-$1.87, just below analysts’ expectations. Due to the combined effect of the two, the share price was largely inactive.
Looking ahead, additional revenue and backlog from the Airwave acquisition and new contract wins are expected to drive the company’s growth. It must be noted that Airwave Solutions has played a crucial role in bolstering Motorola’s top line growth over the past couple of quarters. While this trend is likely to persist in the upcoming quarter, it should subside once Airwave as part of Motorola becomes more than one year old.
From a bottom line perspective, strong cost controls and significant share buybacks are expected to buttress the company’s earnings per share going forward. During the third quarter, Motorola was able to improve its operating margins by 5.3%, by lowering its operating expenses. We expect the company to sustain such control over its operating expenses going forward. Furthermore, the company had allocated another $2 billion to buybacks and it still had $400 million pending from its previous plan at the end of the second quarter. With continous buyback activities, fewer numbers of shares outstanding will magnify the impact of increased operating income.
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Have more questions about Motorola Solutions? See the links below:
Notes:
- What’s Motorola Solutions’ Revenue And Net Income Breakdown In Terms Of Different Operating Segments?
- How Has Motorola’s Revenue & Cash Profit Composition Changed In The Last Four Years?
- By How Much Have Motorola Solutions’ Revenue and EBITDA Increased In The Last Five Years?
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