By Ang Gao
Motorola Solutions Inc., based in Chicago, reported a loss of $575 million, or $3.56 per diluted share, down from a profit of $243 million, or $1.43 per share, in the fourth quarter of 2016. But adjusted earnings beat expectations and the stock rose 4 percent.
The loss reflected a one-time charge of $874 million related to recent U.S. tax reform, said Gino A. Bonanotte, Motorola’s executive vice president and chief financial officer, in an earnings conference call. Without the tax charge, earnings per share rose to $2.10 from $2.03 a year ago. The average estimate of five analysts surveyed by Zacks Investment Research was $2.03 earnings per share.
Quarterly revenues increased to $1.96 billion, up 4 percent from $1.88 billion a year ago, which exceeded the estimate of four analysts surveyed by Zacks of $1.95 billion.
“We finished the year with a very strong fourth quarter, capping a record year for revenue, operating earnings, cash flow and backlog driven by continued organic growth on strength in LMR solutions,” said Greg Brown, chairman and CEO of Motorola Solutions Inc., in a press release. “We are poised for continued growth in LMR and software and services.” LMR is a land mobile radio system, intended for use in vehicles or on foot.
Products segment revenue reached $1.23 billion, up 1 percent from the same quarter a year ago, driven by growth in North America land mobile radio system, a wireless communications system intended for use by terrestrial users in vehicles or on foot, and global commercial products.
Product backlog ended the quarter at $1.9 billion, increasing 25 percent compared with last year, which is the 13th consecutive quarter of year-over-year growth.
Services segment revenue grew 10 percent with growth in every region in the fourth quarter of 2017, up 10 percent from last year with growth in every region. Managed & Support Services grew 17 percent, including $32 million from acquisitions.
Cutting down operating expenses and becoming more efficient contributed to the results, said Keith Housum, managing director and equity research analyst at Northcoast Research.
The company predicted a revenue growth of approximately 7 percent and an organic growth of 5 percent in the first quarter of 2018. The company expects non-GAAP earnings per share in the range of 83 cents to 88 cents per diluted share.
Motorola Solutions saw a loss of $155 million, or 95 cents per share, in the full year 2017. Revenues increased to $6.38 billion, up 6 percent from $6.04 billion.
The company’s shares closed at $103.87 on Friday, increasing $4.75, or 4.79 percent.