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.
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