Before the opening bell, Motorola Solutions Inc. (MSI) reported weaker results for the first quarter of 2013, with both the top and the bottom lines missing the Zacks Consensus Estimate. The company has also reduced its revenue outlook due to sluggish growth in the Government segment.
Fourth-Quarter Results in Details
Quarterly GAAP net income from continuing operations was $192 million or 68 cents per share compared with $159 million or 50 cents per share in the prior-year quarter.
Adjusted EPS of 55 cents in the quarter was just below the Zacks Consensus Estimate of 56 cents. Quarterly total revenue was $1,973 million, up 1% year over year, but was below the Zacks Consensus Estimate of $2,055 million.
Quarterly gross margin was 48.4% compared with 49.7% in the prior-year quarter. Operating income in the reported quarter was $216 million, down by 6.9% year over year. Quarterly operating margin was 10.9% versus 11.9% in the prior-year quarter. During the first quarter of 2013, Motorola Solutions repurchased shares worth $357 million.
During the quarter, Motorola Solutions generated negative $31 million in cash from operations compared with $69 million in the year-ago quarter. Quarterly free cash flow (operating cash flow less capital expenditure) was negative $77 million compared with a $20 million in the prior-year quarter.
At the end of the first quarter of fiscal 2013, Motorola Solutions had $3,718 million in cash, cash equivalents and marketable securities against $3,603 million at the end of fiscal 2012. Total debt at the end of the quarter was $2,450 million compared with $1,859 million at the end of fiscal 2012. Debt-to-capitalization ratio at the end of the reported quarter was 0.44 compared with 0.36 at the end of fiscal 2012.
Government Segment
Quarterly total revenue was $1,346 million, up 3% year over year. Operating income came in at $180 million, up 20% year over year.
EnterpriseSegment
Quarterly total revenue was $627 million, down 4% year over year. Operating income stood at $36 million, down 56% year over year.
Performance by Category
Quarterly product revenues were $1,381 million, down 4.4% year over year. Services revenues were $592 million, up 15.6% year over year. Quarterly product gross margin was 52.9% compared with 54.4% in the year-ago quarter. Services gross margin was 38% compared with 36.5% in the year-ago quarter.
Future Financial Outlook
Motorola Solutions expects the second quarter of 2013 revenues to remain the same or fall by 2% year over year. EPS from continuing operations is expected in the range of 66 cents to 71 cents.