Motorola Solutions CEO Greg Brown said the company reported an “outstanding” set of results, with record backlog for a first quarter and strong organic growth, weighed down by legal fees for a past court case. Brown added that the recent acquisition of Avigilon provided a strong foundation for continued revenue and earnings growth. This acquisition, and that of Airbus DS Communications, are now complete. As a result, Motorola has upped its guidance for the full year. It now expects revenues to rise 14 percent, from its earlier guidance of 5 percent growth, adjusted to 10-11 percent in February at an analyst meeting. Adjusted earnings per share are seen up to USD 6.70-6.85, from the earlier guidance of USD 6.50-6.65.
For Q1, revenues passed expectations to rise 15 percent from the year before to USD 1.468 billion, buoyed by organic growth of 10 percent. At North America, organic growth went to 8 percent. Products lifted 14 percent while Services advanced 15 percent. The net result profit jumped to USD 117 million from 77 million while diluted EPS went to USD 0.69 from 0.45. The company ended the quarter with a backlog of USD .6 billion, up by USD 1.1 billion year-on-year. Adjusted diluted EPS amounted to USD 1.10.
The operating profit and operating margin for the group slipped 1 percent to USD 171 million and to 11.6 percent from 13.5 percent, pulled down by higher acquisition related transaction costs and the collection of a USD 52 million legal judgement from 2017. These factors were offset by higher sales volume and a higher gross margin. The operating cash flow and free cash flow were both negative, at negative USD 500 million and negative USD 541 respectively, compared to positive 142 million and 74 million. Motorola attributed the falls to a USD 500 million debt-funded US pension contribution, higher cash tax payments, higher incentive payments and the legal fee.
For the second quarter, the company is guiding for revenues up 15 percent, with organic growth of 4 percent and adjusted EPS of USD 1.34-1.39.
