Communications equipment maker Motorola Solutions, Inc. (MSI) reported Wednesday a profit for the fourth quarter that nearly doubled from last year, reflecting significantly improved operating margins and revenue growth. Adjusted earnings per share from continuing operations topped analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also provided earnings guidance for the first quarter, in line with Street view.
Motorola Solutions, which makes communication infrastructure, devices and software, was created in January 2011 when Motorola, Inc. was split into two independent public companies. The other entity, Motorola Mobility, was later acquired by Google, Inc. (GOOG).
Schaumburg, Illinois-based Motorola Solutions reported net earnings of $336 million or $1.18 per share for the fourth quarter, sharply higher than $184 million or $0.56 per share in the prior-year quarter. Results for the prior-year quarter included earnings from discontinued operations of $7 million.
Excluding items, adjusted earnings from continuing operations for the quarter was $1.10 per share, compared to last year's $0.87 per share.
On average, 15 analysts polled by Thomson Reuters expected earnings of $1.02 per share for the quarter. Analysts estimates typically exclude special items.
Sales for the quarter grew 6 percent to $2.44 billion from $2.30 billion in the same quarter last year, but missed thirteen Wall Street analysts' consensus estimate of $2.45 billion by a whisker.
Net sales from products grew to $1.79 billion from $1.69 billion, and net sales from services were $652 million, up from $611 million last year.
Government segment sales grew 10 percent to $1.71 billion, while enterprise segment sales declined 3 percent to $733 million from last year. Excluding Psion, enterprise segment sales were down 12 percent.
Gross margin for the quarter contracted 10 basis points to 50.3 percent, while operating margins improved 530 basis points to 17.3 percent from last year on lower expenses.
For fiscal 2012, the company reported net earnings of $881 million or $2.96 per share, lower than $1.16 billion or $3.41 per share in the prior year. Results for the prior year included earnings from discontinued operations of $411 million. Excluding items, adjusted earnings was $3.20 per share, compared to last year's $2.61 per share. Sales for the full year grew 6 percent to $8.70 billion from the previous year.
Street was looking for full-year 2012 earnings of $3.14 per share on annual revenues of $8.71 billion.
"It was another outstanding year for Motorola Solutions as we continued to deliver strong operational and financial results. We strengthened our product portfolio, expanded operating margins, generated $1.1 billion in operating cash and returned $2.7 billion in capital to our shareholders," Chairman and CEO Greg Brown said in a statement.
Looking ahead to the first quarter of fiscal 2013, the company expects adjusted earnings from continuing operations in a range of $0.62 to $0.67 per share, on anticipated revenue growth of 4 to 5 percent. Analysts currently expect the company to report earnings of $0.67 per share on revenues of $2.07 billion for the quarter.
For fiscal 2013, Motorola Solutions projects revenue growth of about 5 to 5.5 percent, while Street is currently looking for annual revenues of $9.20 billion.
In Wednesday's regular trading session, MSI is currently trading at $56.90, down $1.39 or 2.38% on a volume of 1.20 million shares.
by RTT Staff Writer
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