Motorola Solutions Inc (NYSE: MSI) reported its fourth-quarter FY23 financial results yesterday, causing its shares to trade lower in premarket trading. Despite the dip in stock price, the company’s sales of $2.85 billion, which were up 5% year-over-year, surpassed the consensus estimate of $2.82 billion. This growth was primarily driven by increased sales in North America and International markets.
In terms of segment performance, the Products and Systems Integration segment experienced a 4% year-over-year growth, while Software and Services rose by 7% in the quarter. Additionally, Motorola Solutions ended the year with a backlog of $14.3 billion, including a strong backlog in Products and Systems Integration.
The company’s adjusted operating margin expanded to 30.5% from 30.4% in the year-ago quarter. This improvement was aided by higher sales and lower direct material costs, although it was partially offset by a revenue reduction for Airwave. Adjusted operating earnings rose 6% year-over-year to $870 million, and adjusted earnings per share of $3.90 surpassed the consensus estimate of $3.63.
Motorola Solutions also demonstrated strong cash flow in the quarter, with both operating and free cash flow reaching $1.2 billion. This was primarily driven by higher earnings, although it was partially offset by higher cash taxes. The company utilized its cash flow to pay $146 million in dividends and repurchase shares worth $117 million. Additionally, Motorola Solutions announced a $2.0 billion increase to its share repurchase authorization.
Looking ahead, Motorola Solutions provided a positive outlook for the first quarter and the full year of 2024. The company expects first-quarter adjusted earnings per share of $2.50-$2.55, surpassing the consensus estimate of $2.37. For 2024, Motorola Solutions anticipates adjusted earnings per share of $12.62-$12.72, slightly below the consensus estimate of $12.68. The company also expects revenue growth of approximately 8% for the first quarter and around 6% for the full year of 2024.
In other news, Motorola Solutions recently entered into a strategic, multi-year agreement with Google Cloud to focus on innovating cloud solutions in the safety and security technologies space. This collaboration aims to enhance the company’s offerings and provide advanced solutions to its customers.
Despite the positive outlook and strategic partnerships, Motorola Solutions’ shares traded lower by 3.19% at $317.87 in premarket trading on Friday. Investors may be reacting to various factors, including broader market conditions and profit-taking following the release of the company’s financial results.
In conclusion, Motorola Solutions Inc reported strong fourth-quarter FY23 results, beating sales estimates and demonstrating growth in its key segments. The company’s positive outlook for the first quarter and 2024, along with its strategic partnership with Google Cloud, positions it well for continued success in the safety and security technologies sector. However, market volatility and profit-taking may impact the short-term performance of its stock.
