The FINANCIAL — Motorola Solutions, Inc. on May 4 reported its earnings results for the first quarter of 2017.
“Q1 was a strong quarter and an excellent start to the year,” said Greg Brown, chairman and CEO of Motorola Solutions. “I’m very pleased with our momentum going forward.”
Revenue – Sales increased 7 percent in total, and 3 percent excluding Airwave. The increase reflects growth in EMEA and the Americas. Product segment sales were up $1 million. The Services segment grew 18 percent, including $58 million of incremental Airwave revenue. Excluding Airwave, Services grew 7 percent.
Operating margin – GAAP operating margin was 13.7 percent of sales, compared with 8.4 percent in the year-ago quarter. The improvement reflects higher sales and gross margin. Non-GAAP operating margin was 17.5 percent of sales, compared with 13.9 percent in the year-ago quarter, driven by higher sales and gross margin as well as lower operating expenses.
Cash flow – The company generated $142 million in operating cash, an increase of $129 million from the year-ago quarter on higher revenue and earnings. Q1 also included a $52 million legal settlement. Free cash flow2 was up $112 million to $74 million, driven by higher revenue and earnings.
Capital Allocation – The company ended the quarter with cash and cash equivalents of$829 million and a net debt position of approximately $3.6 billion3. The company repurchased approximately $178 million of its common stock, paid approximately $77 million in cash dividends, and invested $55 million in acquisitions.
Backlog – The company ended the quarter with $8.5 billion of backlog, up $129 million from the year-ago quarter. Products backlog is up $285 million, while Services backlog is down $156 million, driven by a reduction of approximately $650 million in Airwave backlog over the prior 12 months.
$80 million to upgrade and manage a nationwide TETRA network in Europe
$38 million for Managed Services with Victoria Police in Australia
$34 million P25 network with multi-year services in California
$10 million P25 system with Central Louisiana Electric Company (CLECO)
Double-digit growth for Command Center software driven by Spillman, Emergency CallWorks, and PremierOne solutions
Innovation and investments in growth
Announced the planned acquisition of Kodiak Networks, a leading provider of broadband push-to-talk for commercial customers, which adds a carrier-integrated, cellular push-to-talk solution for mobile operators around the world
Acquired Interexport, a provider of managed services for communications systems to public safety and commercial customers in Chile
Announced new head of software, Andrew Sinclair, to lead a new integrated Software Enterprise team focused on the development, sales and delivery of software
Launched WAVE OnCloud, which provides instant communications between various devices and networks with a new subscription-based Software-as-a-Service (SaaS) model that reduces adoption barriers
Second-quarter 2017 – Motorola Solutions expects revenue growth of 2 to 3 percent compared with the second quarter of 2016. The company expects non-GAAP earnings in the range of $0.98 to $1.03 per share.
Full-year 2017 – The company now expects revenue growth of approximately 2 percent versus the prior outlook of 1 to 2 percent, and raises non-GAAP earnings per share to $5.08 to $5.23 versus the prior outlook of $5.05 to $5.20.