Motorola Solutions profit beats estimates on government spending

SCHAUMBURG, Ill., Wed Jan 23, 2013 — Communications gear maker Motorola Solutions Inc. reported better-than-expected fourth-quarter profit, boosted by higher government spending on public safety, but forecast current quarter revenue below analysts’ estimates.

The company expects first-quarter revenue to increase 4 percent to 5 percent from a year earlier. This means a revenue of between $2.03 billion and $2.05 billion.

It forecast earnings of between 62 cents and 67 cents per share from continuing operations in the first quarter of 2013.

Analysts on average are expecting a profit of 67 cents per share on revenue of $2.07 billion, according to Thomson Reuters I/B/E/S.

Motorola Solutions benefited over the past year as two-way radio users were required by the Federal Communications Commission to upgrade their devices for a switch to narrow bands of 12.5 kHz from wideband channels of 25 kHz by Jan. 1, 2013.

The company dominates the two-way radio market with its land-mobile-radio systems and public-safety products.

“In 2013, we expect the end of narrowbanding to result in government revenue growth slowing down to the mid single digits … from the strong growth seen last year,” Sanford C. Bernstein analyst Pierre Ferragu wrote in a pre-earnings note.

Net income from continuing operations rose to $336 million, or $1.18 per share, in the fourth quarter, from $177 million, or 54 cents per share, a year earlier.

Excluding items, the company earned $1.10 per share from continuing operations, above analysts’ expectations of $1.02.

Revenue rose 6 percent to $2.44 billion, in-line with analysts’ estimates of $2.45 billion.

 

Motorola Solutions is not related to Motorola Mobility, the cellphone maker bought by Google Inc. for $12.5 billion in 2011.

Shares of the company were up marginally at $59 in premarket trading on Wednesday. They closed at $58.29 on the New York Stock Exchange on Tuesday.