Motorola Solutions (MSI): Big beat and raise with a side of augmented share repurchase program

$MSI(MSI)

Motorola Solutions, known for its communications and analytics solutions, announced positive Q4 and full-year 2023 financial outcomes. The company's success is attributed to a diverse product portfolio, global clientele, and strategic investments in innovation and acquisitions.

For Q4, sales rose to $2.8 billion, marking a 5% increase year-over-year, with full-year sales reaching $9.9 billion, up by 10%. GAAP EPS for Q4 was $3.47, showing a slight 1% increase, while full-year GAAP EPS grew by 25% to $9.93. Non-GAAP EPS for Q4 was $3.90, an 8% increase from the previous quarter, with full-year non-GAAP EPS up by 15% to $11.95.

The company generated $1.2 billion in operating cash flow for Q4, contributing to a total of $2.0 billion for the year, up by 12%. This strong cash flow is essential for funding ongoing innovations and recent acquisitions like IPVideo.

Motorola Solutions' GAAP operating margin slightly improved to 25.9% in Q4, with a non-GAAP operating margin of 30.5%. The GAAP effective tax rate for Q4 rose to 15.7% due to lower benefits from a previous valuation allowance release.

During Q4, Motorola Solutions allocated $146 million to dividends, $117 million to stock repurchases, and $81 million to capital expenditures. Despite a slight decrease, the year-end backlog remained substantial at $14.3 billion.

CEO Greg Brown highlighted 2023 as a remarkable year, crediting robust demand for the company's safety and security solutions. With strong business momentum, Motorola Solutions looks forward to continued growth in 2024.

For Q1 2024, the company projects about 8% revenue growth and non-GAAP EPS ranging from $2.50 to $2.55. The full-year forecast anticipates around 6% revenue growth and non-GAAP EPS between $12.62 and $12.72, reflecting confidence in sustained growth and market navigation.