Will Motorola Solutions’ Revenue Rise in Fiscal 2016?


Oct. 25 2016, Updated 3:04 p.m. ET

Revenue growth expected between 5% and 7%

For 2016, Motorola Solutions (MSI) is expecting revenue growth between 5% and 7%, with non-GAAP (generally accepted accounting principles) EPS (earnings per share) between $4.45 and $4.65. For 2016, its operating expenses are projected to be $1.45 billion, which would represent a fall of $120 million YoY (year-over-year).

Analysts estimate that the firm will post revenues of $6 billion for the fiscal year ending in December 2016, with a low estimate of $5.91 billion and a high estimate of $6.06 billion. If MSI meets analyst revenue estimates of $6 billion, it will mean a YoY rise of 5.4% from 2015.

As the above chart shows, MSI’s revenue fell 5.5% YoY in fiscal 2014 to $5.88 billion and 3.2% YoY in fiscal 2015 to $5.69 billion.

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Acquisition of Airwave will help drive revenue

In 2011, Motorola split and spun off its cell phone business, which was acquired by Google (GOOG) (GOOGL) for $12.5 billion and then sold to China’s (FXI) Lenovo (LNVGY) for $2.9 billion. Although Lenovo got the patents held by Motorola, MSI still has a “perpetual-use, royalty-free use of that patent portfolio.”

Motorola Solutions is now the leading provider of public safety systems globally. Earlier this year, MSI announced that it had completed the acquisition of Airwave, the largest operator of public safety networks in the world. According to MSI Chief Executive Officer and Chairman Greg Brown, this acquisition will enable Motorola to grow its managed and support services business significantly.

Motorola can leverage Airwave’s managed service infrastructure, contact center, and operational assets beyond the United Kingdom (EWU). This acquisition also increases recurring revenue streams by 50% and provides geographic diversification and additional smart public safety applications.


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