Motorola Announces Fourth-Quarter, 2020 Financial Results
Friday, February 05, 2021 | Comments

Motorola Solutions reported its earnings results for the fourth quarter and full year of 2020.

“Our fourth-quarter results, highlighted by record LMR orders in North America and continued strong growth in the software and services segment, reflect the criticality of our solutions and our team's unwavering execution throughout an unprecedented year,” said Motorola Solutions Chairman and CEO Greg Brown. “This momentum, combined with our record ending backlog, positions us very well for strong growth in 2021.”

Fourth-quarter revenue was $2.3 billion, down 4% from the year-ago quarter, driven by declines in North America and international. The products and systems integration segment declined 10% primarily due to lower sales of public-safety LMR products and professional and commercial radio (PCR), partially offset by growth in video security. The software and services segment grew 8%, driven by growth in LMR services, video security and command center software. Revenue from acquisitions was $60 million, and the impact of favorable currency rates was $19 million.

Generally accepted accounting principles (GAAP) operating margin was 24.4% of sales, down from 24.8% in the year-ago quarter primarily due to lower sales in the products and systems integration segment, partially offset by higher sales and improved operating leverage in the software and services segment. Non-GAAP operating margin was 29.3% of sales, down from 29.7% in the year-ago quarter primarily due to lower sales in the products and systems integration segment, partially offset by higher sales and improved operating leverage in the software and services segment.

The company generated $703 million in operating cash, compared with $795 million in the year-ago quarter. Free cash flow was $637 million, compared with $736 million in the year-ago quarter. The year-over-year decline in cash flow was primarily driven by lower sales in the fourth quarter of 2020.

During the quarter, the company repurchased $171 million of its common stock and paid $109 million in dividends. Additionally, the company repaid the remaining $200 million of its revolving credit facility borrowing.

Full-year revenue was $7.4 billion, down 6%, driven by declines in North America and international. The products and systems integration segment declined 13% primarily due to lower sales of public-safety LMR products and PCR, partially offset by growth in video security. The software and services segment grew 9% driven by growth in LMR services, video security and command center software. Revenue from acquisitions was $203 million, and the impact of unfavorable currency rates was $12 million.

For the full year, GAAP operating margin was 18.7% of revenue, compared with 20% for the prior year. The decrease was primarily driven by lower sales in the products and systems integration segment, partially offset by higher sales and improved operating leverage in the software and services segment. Non-GAAP operating margin was 24.8% of revenue, compared with 25.0% for the prior year, driven by lower sales in products and systems integration, partially offset by higher sales and improved operating leverage in the software and services segment.

For 2020, the company generated $1.6 billion in operating cash, compared to $1.8 billion in the prior year. Free cash flow was $1.4 billion, compared to $1.6 billion in the prior year. The decrease in cash flow was driven by lower sales and higher cash taxes, partially offset by improvements in working capital.

The company ended the year with record backlog of $11.4 billion, up $175 million from the prior year. Software and services segment backlog was up 3% or $213 million, primarily driven by growth in North America and $139 million of favorable currency rates, partially offset by revenue recognized for the Airwave and Emergency Services Network (ESN) contracts. Products and systems integrations segment backlog was down 1% or $38 million driven by delay in sales engagements related to COVID-19.

In 2020, the company repurchased $612 million of its common stock at an average price of $155.93, paid $436 million in dividends and used $287 million for acquisitions. Additionally, the company refinanced approximately $900 million of debt with a new 10-year debt issuance at 2.3%.

For the first quarter of 2021, the company expects revenue growth of 5.5% to 6% compared with the first quarter of 2020. The company expects non-GAAP earnings per share in the range of $1.58 to $1.64 per share. This assumes current foreign exchange rates, approximately 174 million fully diluted shares and an effective tax rate of approximately 19%.

For the full year 2021, the company expects revenue growth of 7.25% to 8% and non-GAAP earnings per share in the range of $8.50 to $8.62 per share. This assumes current foreign exchange rates, 174 million fully diluted shares and a non-GAAP effective tax rate of 22.5% to 23%.

Would you like to comment on this story? Find our comments system below.



 
 
Post a comment
Name: *
Email: *
Title: *
Comment: *
 

Comments

No Comments Submitted Yet

Be the first by using the form above to submit a comment!

Site Navigation

Close