Company raises full-year revenue and EPS guidance following strong Q1 results
CHICAGO – May 6, 2021 – Motorola Solutions, Inc. (NYSE: MSI) today reported its earnings results for the first quarter of 2021. Click here for a printable news release and financial tables.
"Q1 was an outstanding quarter, with record first-quarter revenue, operating earnings, cash flow and ending backlog,” said Greg Brown, chairman and CEO of #motorola Solutions. “I’m very pleased with our double digit growth in video security, command center software and LMR services. This strong demand combined with our ending backlog position is driving our increased expectations for the full year.”
The company also announced that its board of directors has approved, subsequent to quarter end, a $2 billion increase to the share repurchase program, raising the total authorization since July 2011 to $16 billion. Under the company’s previously authorized $14 billion share repurchase program, approximately $479 million in repurchase authority remained at the end of the first quarter of 2021. The company may continue to repurchase shares from time to time in the open market or in other privately negotiated transactions, subject to market conditions.
KEY FINANCIAL RESULTS (presented in millions, except per share data and percentages)
Q1 2021 | Q1 2020 | % Change | |||||
Sales | $1,773 | $1,655 | 7% | ||||
GAAP | |||||||
Operating Earnings | $298 | $259 | 15% | ||||
% of Sales | 16.8% | 15.6% | |||||
EPS | $1.41 | $1.12 | 26% | ||||
Non-GAAP | |||||||
Operating Earnings | $411 | $347 | 18% | ||||
% of Sales | 23.2% | 21.0% | |||||
EPS | $1.87 | $1.49 | 26% | ||||
Products and Systems Integration Segment | |||||||
Sales | $1,015 | $993 | 2% | ||||
GAAP Operating Earnings | $77 | $92 | (16)% | ||||
% of Sales | 7.6% | 9.3% | |||||
Non-GAAP Operating Earnings* | $131 | $123 | 7% | ||||
% of Sales | 12.9% | 12.4% | |||||
Software and Services Segment | |||||||
Sales | $758 | $662 | 15% | ||||
GAAP Operating Earnings | $221 | $167 | 32% | ||||
% of Sales | 29.1% | 25.2% | |||||
Non-GAAP Operating Earnings* | $280 | $224 | 25% | ||||
% of Sales | 36.9% | 33.8% |
*Non-GAAP financial information excludes the after-tax impact of approximately $0.46 per diluted share related to share-based compensation, intangible assets amortization expense and highlighted items. Details on these non-GAAP adjustments and the use of non-GAAP measures are included later in this news release.
OTHER SELECTED FINANCIAL RESULTS
NOTABLE WINS AND ACHIEVEMENTS
Software and Services
Products and Systems Integration
BUSINESS OUTLOOK
The company has not quantitatively reconciled its guidance for forward-looking non-GAAP metrics to their most comparable GAAP measures because the company does not provide specific guidance for the various reconciling items as certain items that impact these measures have not occurred, are out of the company’s control, or cannot be reasonably predicted. Accordingly, a reconciliation to the most comparable GAAP financial metric is not available without unreasonable effort. Please note that the unavailable reconciling items could significantly impact the company’s results.
COVID-19
In response to the COVID-19 pandemic, the company continues to adhere to its plans to keep its employees and customers healthy and safe, including having office workers work remotely, reducing employee travel, withdrawing from certain industry events, increasing the frequency of cleaning services, encouraging face coverings, and using thermal scanning. We have continued to ensure customer continuity by fulfilling several emergency orders, completing remote software maintenance where possible, and continuing to service our mission-critical networks on-site as needed to ensure seamless operations. In addition, the company's supply chain partners remain supportive and continue to work to fulfill the necessary service levels to the company and its customers.
The sales teams’ have continued to improve virtual engagement with our customers. Additionally, the company’s engineering teams have adapted its solutions offerings to equip customers with the latest technology in an effort to protect their workplace from the spread of COVID-19. Specifically, in Video Security and Analytics, the company has adapted its software and hardware offerings to provide analytics for occupancy counting, face mask detection and thermal detection capabilities.
Although the COVID-19 pandemic continued to influence our business activities in the first quarter of 2021, the negative impacts on our business from COVID-19 have begun to ease. In March 2021, the President of the United States signed into law the American Rescue Plan Act of 2021 (the "ARPA"), which is intended to provide economic stimulus, specifically additional funding to state and local governments, education and healthcare, as well as other funding relief provisions, in order to address the impact of the COVID-19 pandemic. We continue to evaluate the potential impact of the ARPA on our business and results of operations. In addition, we continue to assess our operating expenses and identify cost reducing initiatives, including lower travel costs, contractor spend and reducing our real estate footprint.
CONFERENCE CALL AND WEBCAST Motorola Solutions will host its quarterly conference call beginning at 4 p.m. U.S. Central Time (5 p.m. U.S. Eastern Time) on Thursday, May 6. The conference call will be webcast live at www.motorolasolutions.com/investor.
CONSOLIDATED GAAP RESULTS (presented in millions, except per share data)
A comparison of results from operations is as follows:
Q1 2021 | Q1 2020 | |
Net sales | $1,773 | $1,655 |
Gross margin | 860 | 787 |
Operating earnings | 298 | 259 |
Amounts attributable to #motorola Solutions, Inc. common stockholders Net earnings | 244 | 197 |
Diluted EPS | 1.41 | 1.12 |
Weighted average diluted common shares outstanding | 173.2 | 175.9 |
HIGHLIGHTED ITEMS
The table below includes highlighted items, share-based compensation expense and intangible assets amortization expense for the first quarter of 2021.
(per diluted common share) | Q1 2021 |
GAAP Earnings | $1.41 |
Highlighted Items: | |
Intangible assets amortization expense | 0.26 |
Share-based compensation expenses | 0.13 |
Reorganization of business charges | 0.07 |
Operating lease asset impairments | 0.03 |
Hytera-related legal expenses | 0.01 |
Acquisition-related transaction fees | 0.01 |
Fair value adjustments to equity investments | (0.02) |
Release of uncertain tax positions | (0.03) |
Non-GAAP EPS | $1.87 |
USE OF NON-GAAP FINANCIAL INFORMATION
In addition to the GAAP results included in this news release, #motorola Solutions also has included non-GAAP measurements of results, including free cash flow, non-GAAP operating earnings, non-GAAP EPS, non-GAAP operating margin, non-GAAP tax rate and organic revenue. The company has provided these non-GAAP measurements to help investors better understand its core operating performance, enhance comparisons of core operating performance from period to period and allow better comparisons of operating performance to its competitors. Among other things, management uses these operating results, excluding the identified items, to evaluate performance of the businesses and to evaluate results relative to certain incentive compensation targets. Management uses operating results excluding these items because it believes this measurement enables it to make better period-to-period evaluations of the financial performance of core business operations. The non-GAAP measurements are intended only as a supplement to the comparable GAAP measurements and the company compensates for the limitations inherent in the use of non-GAAP measurements by using GAAP measures in conjunction with the non-GAAP measurements. As a result, investors should consider these non-GAAP measurements in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with generally accepted accounting principles.
Further information in the press release to download
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