Motorola Solutions Misses Earnings Expectations, Gives Dim Forecast, and Plunges

Jacob Harper |

Motorola Solutions Inc (MSI) fell below analyst’s expectations for its earnings and subsequently provided a dim outlook for future growth. The news sent shares of the company’s stocks spiraling.

The Schaumberg, Il.-based company is made up of the remains of the old Motorola company, following the spin-off and sale of its cell phone division, Motorola Mobility. Motorla Mobility was sold to Google Inc. (GOOG) in 2011.

As its main business now is the sale of walkie-talkies, Motorola Solutions relies heavily on government contracts for revenue. Government sales for the company were down 1 percent. More disappointing than the government sales, enterprise sales (sales to non-government businesses) were down 5 percent.

Motorola's enterprise business manufactures and sells mobile computers, tablets and security products, and account for a third of total revenue.

Following the disappointing earnings report, the company revised downward projections for growth. They now expect growth next year of flat to 1 percent, down from earlier projections of 3 to 4 percent, down from even earlier projections of 5 to 5.5 percent.  

Motorola reported net income of $266 million, or $0.94 per share, versus the $278 million, or $0.60 per share, from the same period a year ago. Revenue for the quarter was $2.1 billion, as compared to $2.14 billion from the previous year. Analysts were expecting a profit of $1.04 per share on revenues of $2.13 billion.

Motorola's strock plummeted on the dismal news. The stock dropped 6.54 percent to hit $56.04. Their stock dropped 12 percent following the earningsreport for the first quarter of 2013. They're still up 6.73 percent on the year.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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