SCHAUMBURG, Ill. — (BUSINESS WIRE) — April 15, 2014 — Motorola Solutions, Inc. (NYSE: MSI) today announced preliminary financial results for its first quarter 2014. Sales results were below the company’s previous revenue outlook, primarily due to softer demand in the North America Government business along with lower than anticipated Enterprise sales. Non-GAAP earnings per share were within the range of the company’s previous earnings outlook. First quarter sales are expected to be approximately $1.8 billion, down approximately 9 percent from the first quarter of 2013. Full-year total company 2014 sales are now expected to decline low single digits while operating margins are expected to be comparable to previous guidance. This full-year sales outlook assumes Enterprise growth and a low- to mid-single digit decline for the combined Government and iDEN business. The company will provide full earnings results on its call, now scheduled for May 1.
GAAP operating earnings in the first quarter of 2014 are expected to be $170 million or 9.4 percent of sales. GAAP earnings per share are expected to be $0.49.
Non-GAAP* operating earnings in the first quarter are expected to be $212 million or 11.8 percent of sales. Non-GAAP earnings per share for the quarter are expected to be $0.50, within the company’s previous guidance.
Greg Brown, chairman and CEO of Motorola Solutions, said: “Revenues in the quarter did not meet our expectations due primarily to lower than expected volumes in our North America Government business in addition to a push out of certain Enterprise orders late in the quarter. While revenues were less than anticipated in the first quarter, we remain confident that we are well positioned for long-term profitable growth based on our strong pipeline position. We remain committed to our value creation strategy for our shareholders, which combines profitable growth with significant and consistent capital return programs.”
In a separate press release issued today, Motorola Solutions announced the sale of its Enterprise business to Zebra Technologies for $3.45 billion. The release can be found on the company’s website at www.motorolasolutions.com/investor.
Transaction Conference Call and Webcast
Investors are invited to listen to a live webcast of the Motorola Solutions conference call discussing the announced pending transaction between Motorola Solutions and Zebra. The conference call will be held at 8:30 a.m. U.S. Eastern Daylight Time today. To listen to the call, visit the company’s website at www.motorolasolutions.com/investor.
First Quarter Conference Call and Webcast
Motorola Solutions will host its quarterly conference call beginning at 8 a.m. U.S. Eastern Daylight Time on Thursday, May 1. The conference call will be webcast live with audio and slides at www.motorolasolutions.com/investor.
Use of Non-GAAP Financial Information
In addition to the GAAP results included in this presentation, Motorola Solutions also has included Non-GAAP measurements of results. We have provided these Non-GAAP measurements to help investors better understand our core operating performance, enhance comparisons of core operating performance from period to period and allow better comparisons of operating performance to our 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 GAAP.
*Non-GAAP financial information excludes from GAAP results the effects of share-based compensation expense, intangible assets amortization expense and highlighted items.
Highlighted items: The company has excluded the effects of highlighted items (and any reversals of highlighted items recorded in prior periods) from its Non-GAAP operating expenses and net income measurements because the company believes that these historical items do not reflect expected future operating earnings or expenses and do not contribute to a meaningful evaluation of the company’s current operating performance or comparisons to the company’s past operating performance.
Share-based compensation expense: The company has excluded share-based compensation expense from its Non-GAAP operating expenses and net income measurements. Although share-based compensation is a key incentive offered to our employees and the company believes such compensation contributed to the revenue earned during the periods presented and also believes it will contribute to the generation of future period revenues, the company continues to evaluate its performance excluding share-based compensation expense primarily because it represents a significant non-cash expense. Share-based compensation expense will recur in future periods.
Intangible assets amortization expense: The company has excluded
intangible assets amortization expense from its Non-GAAP operating
expenses and net income measurements, primarily because it represents a
significant non-cash expense and because the company evaluates its
performance excluding intangible assets amortization expense.
Amortization of intangible assets is consistent in amount and frequency
but is significantly affected by the timing and size of the company’s
acquisitions. Investors should note that the use of intangible assets
contributed to the company’s revenues earned during the periods
presented and will contribute to the company’s future period revenues as
well. Intangible assets amortization expense will recur in future