Motorola Solutions Inc.'s (MSI) first-quarter profit dropped 68% from a year-earlier that included a hefty income-tax benefit, masking broadly higher sales.
The provider of public safety radios, handheld scanners and telecommunications network gear was created last year in the split of Motorola Inc., which spun off the higher-profile mobile-devices and TV-set-top-box operations into Motorola Mobility Holdings Inc. (MMI). In recent quarters, the company's bottom line has been weighed down by charges, even as sales grow.
The company had previously warned its earnings this year would be pressured by lower sales in its iDEN network business.
Motorola Solutions posted a profit of $157 million, or 49 cents a share, down from $497 million, or $1.44 a share, a year earlier. The latest results included an income-tax expense of $85 million, while the year earlier had a $189 million benefit. Excluding items related to stock compensation expenses and other impacts, earnings from continuing operations rose to 59 cents from 54 cents. The company had predicted 50 cents to 55 cents.
Revenue rose 6.6% to $1.96 billion, while analysts polled by Thomson Reuters recently saw revenue of $1.93 billion.
Gross margin improved to 49.7% from 20.4%.
Government sales increased 11% to $1.3 billion, driven by growth across all regions. The smaller enterprise business posted a 2% drop in revenue, hurt by a $31 million decline in iDEN sales.
For the current quarter, the company sees adjusted earnings of 65 cents to 70 cents a share on sales growth of 6%. The latter view tops estimates of analysts polled by Thomson Reuters, who expect sales to grow 2%, and project earnings of 68 cents.
Shares of the company, which affirmed its full-year guidance, closed at $48.66 on Tuesday and were inactive premarket. The stock is up 5.1% so far this year.
-By Kristin Jones; Dow Jones Newswires; 212-416-2208; [email protected]