Motorola Solutions, Inc. MSI reported strong fourth-quarter 2024 results, with both adjusted earnings and revenues surpassing the respective Zacks Consensus Estimate.
Find the latest EPS estimates and surprises on ZacksEarnings Calendar.
The company witnessed healthy revenue and operating earnings growth year over year, driven by the diligent execution of operational plans and strong growth dynamics backed by solid order trends. Management expects this growth momentum to continue in the near term on robust demand patterns.
Net Earnings
On a GAAP basis, net earnings in the fourth quarter were $611 million or $3.56 per share compared with $595 million or $3.47 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 $693 million or $4.04 per share compared with $668 million or $3.90 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 18 cents.
For 2024, GAAP earnings declined to $1.58 billion or $9.23 per share from $1.71 billion or $9.93 per share in 2023. Non-GAAP earnings for 2024 were $2.37 billion or $13.84 per share, up from $2.06 billion or $11.95 per share a year ago.
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 $3.01 billion, up 6% year over year, backed by growth in North America. Solid sales in both segments were driven by the strength of the company’s business model and the value of its mission-critical integrated ecosystem, which further boosted the top line. The company witnessed strong demand for video security, command center software and LMR (land mobile radio) services. The top line beat the Zacks Consensus Estimate of $2.99 billion.
For 2024, revenues were $10.82 billion, up 8% year over year, driven by growth in North America, partially offset by lower revenues from the U.K. Home Office related to the Airwave Charge Control and the exit from the Emergency Services Network (ESN) contract .
Region-wise, quarterly revenues increased 9% year over year in North America to $2.2 billion from $2.02 billion due to growth in LMR, command center software and video security products. International revenues decreased 3% year over year to $807 million from $832 million, primarily driven by lower Ukraine revenues and the exit from the ESN contract, partially offset by growth in Video and Command Center. Acquisitions contributed $37 million to revenues, while foreign exchange tailwinds were $6 million.
Segmental Performance
Net sales from Products and Systems Integration increased to $1.95 billion from $1.89 billion in the year-ago quarter, driven by higher demand for LMR and video security solutions. It also exceeded our estimates of $1.92 billion. The segment’s backlog decreased 17% year over year to $4.1 billion, primarily due to strong LMR shipments.
Net sales from Software and Services were up 11% year over year to $1.06 billion from $958 million, with solid performance across command center software, LMR and video security services. The segment revenues matched our estimates of $1.06 billion. The segment’s backlog was up $1.3 billion to $10.6 billion due to strong demand for all three technologies.
Other Quarterly Details
GAAP operating earnings increased to $814 million from $738 million in the prior-year quarter, driven primarily by a recovery related to the Hytera litigation. Non-GAAP operating earnings improved to $916 million from $870 million. The company ended the quarter with a record backlog of $14.7 billion, up $438 million year over year. Overall GAAP operating margin was 27%, up from 25.9%, while non-GAAP operating margin was 30.4% compared with 30.5% in the year-ago quarter.
Non-GAAP operating earnings for Products and Systems Integration increased 5% year over year to $594 million from $567 million for a margin of 30.5%. The uptick was driven by higher sales, a favorable mix and lower direct material costs. Non-GAAP operating earnings for Software and Services were $322 million, up 6% year over year, for a non-GAAP operating margin of 30.3%.
Cash Flow and Liquidity
Motorola generated $1.07 billion in cash from operating activities in the reported quarter compared with an operating cash flow of $1.25 billion a year ago, bringing the respective tallies for 2024 and 2023 to $2.39 billion and $2.04 billion. Free cash flow in the fourth quarter was $983 million.
During the quarter, the company repurchased $103 million worth of stock. As of Dec. 31, 2024, MSI had $2.1 billion of cash and cash equivalents and $5.68 billion of long-term debt compared with respective tallies of $1.71 billion and $4.71 billion in the prior-year period.
Guidance
For the first quarter of 2025, the company expects revenue growth between 5.0% and 5.5% year over year, with non-GAAP EPS between $2.98 and $3.03 per share. Non-GAAP effective tax rate is forecasted to be approximately 21.0%.
For 2025, management expects non-GAAP earnings in the $14.64 to $14.74 per share range on revenue growth of approximately 5.5%, with a rise in both segments on higher demand. Non-GAAP effective tax rate is estimated to be approximately 23.0%. Operating cash flow is forecasted to be $2.7 billion.
MSI’s Zacks Rank
Motorola currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Keysight Technologies, Inc. KEYS is scheduled to release first-quarter fiscal 2025 earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.69 per share, indicating growth of 3.68% from the year-ago figure.
Workday, Inc. WDAY is scheduled to release fourth-quarter fiscal 2025 earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.75 per share, indicating growth of 11.5% from the year-ago figure.
Light and Wonder LNW is scheduled to release fourth-quarter earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, indicating growth of 47.95% from the year-ago figure.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
