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Motorola Q3 Earnings Beat Estimates on Record Revenues, View Raised
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Motorola Solutions, Inc. (MSI - Free Report) reported strong third-quarter 2024 results with record revenues and operating earnings, driven by the diligent execution of operational plans and healthy growth dynamics backed by solid order trends.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Adjusted earnings and revenues surpassed the respective Zacks Consensus Estimate. In addition, Motorola ended the quarter with record operating cash flow, which further exemplified the strength of its portfolio. The company expects this growth momentum to continue in the near term on robust demand patterns and raised its guidance for 2024.
Net Earnings
On a GAAP basis, Motorola reported GAAP earnings of $562 million or $3.29 per share compared with $464 million or $2.70 per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth.
Excluding non-recurring items, non-GAAP earnings in the quarter were $639 million or $3.74 per share compared with $547 million or $3.19 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 36 cents.
Motorola Solutions, Inc. Price, Consensus and EPS Surprise
Quarterly net sales were a record high at $2.79 billion, up 9% year over year. Solid sales in both segments across all regions were driven by the strength of the company's business model and the value of its mission-critical integrated ecosystem. The company witnessed strong demand for video security, command center software and LMR (land mobile radio) services. The top line beat the consensus estimate of $2.76 billion.
Region-wise, quarterly revenues were up 13% in North America to $2 billion due to growth in LMR, command center software and video security products. International revenues were up 1% to $783 million as growth in video security products and command center software was partially offset by lower revenues in the United Kingdom, owing to prospective price control on Airwave and the exit from the Emergency Services Network contract. Acquisitions contributed $36 million to revenues, while foreign exchange headwinds were $4 million.
Segmental Performance
Net sales from Products and Systems Integration increased to $1.78 billion from $1.61 billion in the year-ago quarter, driven by higher demand for LMR. The segment’s backlog was down $712 million to $4.2 billion, primarily due to solid LMR shipments.
Net sales from Software and Services were up 7% to $1 billion, with solid performance across command center software, LMR and video security services. The segment’s backlog increased $534 million to $9.9 billion, led by strong demand across all three technologies.
Other Quarterly Details
GAAP operating earnings increased to $711 million from $639 million in the prior-year quarter, while non-GAAP operating earnings were up to $830 million from $741 million. The company ended the quarter with a backlog of $14.1 billion, down $178 million year over year.
Overall GAAP operating margin was 25.5%, up from 25%, while non-GAAP operating margin was 29.7% compared with 29% in the year-ago quarter. Non-GAAP operating earnings for Products and Systems Integration were up 24% to $522 million for a margin of 29.3%, driven by higher sales, a favorable mix and lower direct material costs. Non-GAAP operating earnings for Software and Services were $308 million, down 4% year over year, for a non-GAAP operating margin of 30.6% due to the impact of the Airwave charge control.
Cash Flow and Liquidity
Motorola generated $759 million in cash from operating activities in the reported quarter compared with $714 million a year ago, bringing the respective tallies for the first nine months of 2024 and 2023 to $1.32 billion and $799 million. Free cash flow in the third quarter was $702 million. The company repurchased $31 million worth of stock during the quarter. As of Sept. 30, 2024, MSI had $1.4 billion of cash and cash equivalents with $5.67 billion of long-term debt.
Guidance
With solid quarterly results and robust demand patterns, the company raised its guidance for 2024. Non-GAAP earnings for 2024 are currently expected in the $13.63-$13.68 per share range, up from $13.22-$13.30 on revenue growth of 8.25% (up from 8% expected earlier), with a rise in both segments on higher demand.
Moving Forward
Motorola is poised to gain from disciplined capital deployment and a strong balance sheet position. The company expects strong demand across LMR products, the video security portfolio, services and software while benefiting from a solid foundation.
Light & Wonder, Inc. (LNW - Free Report) is scheduled to release third-quarter 2024 earnings on Nov. 12. The Zacks Consensus Estimate for earnings is pegged at a loss of $1.16 per share.
Keysight Technologies, Inc. (KEYS - Free Report) is due to release fourth-quarter fiscal 2024 earnings on Nov. 19. The Zacks Consensus Estimate for earnings is pegged at $1.57 per share, implying a decline of 21.1% from the year-ago reported figure.
Workday, Inc. (WDAY - Free Report) is slated to release third-quarter fiscal 2025 earnings on Nov. 26. The Zacks Consensus Estimate for earnings is pegged at $1.72 per share, indicating growth of 12.4% from the year-ago reported figure.
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Motorola Q3 Earnings Beat Estimates on Record Revenues, View Raised
Motorola Solutions, Inc. (MSI - Free Report) reported strong third-quarter 2024 results with record revenues and operating earnings, driven by the diligent execution of operational plans and healthy growth dynamics backed by solid order trends.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Adjusted earnings and revenues surpassed the respective Zacks Consensus Estimate. In addition, Motorola ended the quarter with record operating cash flow, which further exemplified the strength of its portfolio. The company expects this growth momentum to continue in the near term on robust demand patterns and raised its guidance for 2024.
Net Earnings
On a GAAP basis, Motorola reported GAAP earnings of $562 million or $3.29 per share compared with $464 million or $2.70 per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth.
Excluding non-recurring items, non-GAAP earnings in the quarter were $639 million or $3.74 per share compared with $547 million or $3.19 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 36 cents.
Motorola Solutions, Inc. Price, Consensus and EPS Surprise
Motorola Solutions, Inc. price-consensus-eps-surprise-chart | Motorola Solutions, Inc. Quote
Revenues
Quarterly net sales were a record high at $2.79 billion, up 9% year over year. Solid sales in both segments across all regions were driven by the strength of the company's business model and the value of its mission-critical integrated ecosystem. The company witnessed strong demand for video security, command center software and LMR (land mobile radio) services. The top line beat the consensus estimate of $2.76 billion.
Region-wise, quarterly revenues were up 13% in North America to $2 billion due to growth in LMR, command center software and video security products. International revenues were up 1% to $783 million as growth in video security products and command center software was partially offset by lower revenues in the United Kingdom, owing to prospective price control on Airwave and the exit from the Emergency Services Network contract. Acquisitions contributed $36 million to revenues, while foreign exchange headwinds were $4 million.
Segmental Performance
Net sales from Products and Systems Integration increased to $1.78 billion from $1.61 billion in the year-ago quarter, driven by higher demand for LMR. The segment’s backlog was down $712 million to $4.2 billion, primarily due to solid LMR shipments.
Net sales from Software and Services were up 7% to $1 billion, with solid performance across command center software, LMR and video security services. The segment’s backlog increased $534 million to $9.9 billion, led by strong demand across all three technologies.
Other Quarterly Details
GAAP operating earnings increased to $711 million from $639 million in the prior-year quarter, while non-GAAP operating earnings were up to $830 million from $741 million. The company ended the quarter with a backlog of $14.1 billion, down $178 million year over year.
Overall GAAP operating margin was 25.5%, up from 25%, while non-GAAP operating margin was 29.7% compared with 29% in the year-ago quarter. Non-GAAP operating earnings for Products and Systems Integration were up 24% to $522 million for a margin of 29.3%, driven by higher sales, a favorable mix and lower direct material costs. Non-GAAP operating earnings for Software and Services were $308 million, down 4% year over year, for a non-GAAP operating margin of 30.6% due to the impact of the Airwave charge control.
Cash Flow and Liquidity
Motorola generated $759 million in cash from operating activities in the reported quarter compared with $714 million a year ago, bringing the respective tallies for the first nine months of 2024 and 2023 to $1.32 billion and $799 million. Free cash flow in the third quarter was $702 million. The company repurchased $31 million worth of stock during the quarter. As of Sept. 30, 2024, MSI had $1.4 billion of cash and cash equivalents with $5.67 billion of long-term debt.
Guidance
With solid quarterly results and robust demand patterns, the company raised its guidance for 2024. Non-GAAP earnings for 2024 are currently expected in the $13.63-$13.68 per share range, up from $13.22-$13.30 on revenue growth of 8.25% (up from 8% expected earlier), with a rise in both segments on higher demand.
Moving Forward
Motorola is poised to gain from disciplined capital deployment and a strong balance sheet position. The company expects strong demand across LMR products, the video security portfolio, services and software while benefiting from a solid foundation.
Motorola currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Light & Wonder, Inc. (LNW - Free Report) is scheduled to release third-quarter 2024 earnings on Nov. 12. The Zacks Consensus Estimate for earnings is pegged at a loss of $1.16 per share.
Keysight Technologies, Inc. (KEYS - Free Report) is due to release fourth-quarter fiscal 2024 earnings on Nov. 19. The Zacks Consensus Estimate for earnings is pegged at $1.57 per share, implying a decline of 21.1% from the year-ago reported figure.
Workday, Inc. (WDAY - Free Report) is slated to release third-quarter fiscal 2025 earnings on Nov. 26. The Zacks Consensus Estimate for earnings is pegged at $1.72 per share, indicating growth of 12.4% from the year-ago reported figure.