Motorola Solutions Reports Financial Results for Second Quarter
Friday, August 07, 2020 | Comments

Motorola Solutions reported its earnings results for the second quarter of 2020. The company’s revenue for the quarter was $1.6 billion, which was down 13% versus the year ago quarter. That decrease was driven by declines in North America and internationally.

Revenue from acquisitions was $40 million, and currency headwinds were $30 million in the quarter. The products and systems integration segment declined 22% primarily due to lower sales of professional and commercial radio (PCR) and public-safety LMR products. The software and services segment grew 5%, driven by growth in North America services and software.

Generally accepted accounting principles (GAAP) operating margin was 13.5% of sales, down from 18.8% in the year-ago quarter primarily due to lower sales in the products and system integration segment. Non-GAAP operating margin was 22.2% of sales, down from 23.9% in the year-ago quarter primarily due to lower sales in the products and system integration segment, partially offset by higher sales and gross margin in the software and services segment.

Operating cashflow for the period was $209 million, compared to $251 million in the year-ago quarter. Free cash flow was $155 million, compared with the $188 million in the year-ago quarter. Cash flow for the quarter decreased due to lower sales and net income, partially offset by improved capital.

During the quarter, the company paid $109 million in cash dividends, repurchased $83 million of shares, used $65 million for acquisitions and incurred $54 million of capital expenditures. Additionally, the company repaid $500 million of its revolving credit facility borrowing, of which $300 million was repaid during the quarter, and $200 million was repaid subsequently.

The company ended the quarter with backlog of $10.5 billion, down $376 million from the year-ago quarter, inclusive of $126 million of unfavorable currency adjustments. Software and Services segment backlog was down 2% or $148 million, inclusive of $116 million of unfavorable currency rates. The decline was primarily related to revenue recognized for the Airwave and ESN contracts, partially offset by growth in North America. Products and Systems Integration segment backlog was down 7% or $228 million, inclusive of $10 million of unfavorable currency adjustments, driven by large International deployments and lower orders due to the delay in sales engagements from COVID-19.

“I’m proud of our solid execution in Q2, led by software & services, in the face of this global pandemic,” said Greg Brown, chairman and CEO, Motorola Solutions. “And, I'm even more impressed with our employees' resilience and unwavering commitment to our customers and to our business. Demand for video security, software & services and increased customer engagements are driving our expectations for improvement in the second half of the year.”

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