Motorola Shares Are Down Premarket Despite Earnings Beat: What's Going On?

Motorola Solutions Inc MSI shares are trading lower premarket after it reported fourth-quarter FY23 yesterday. 

Sales of $2.85 billion, up 5% Y/Y, beat the consensus of $2.82 billion, led by growth in North America and International.

Sales in the Products and Systems Integration segment grew 4% Y/Y, and Software and Services rose 7% Y/Y in the quarter.

The company ended the year with backlog of $14.3 billion, including solid Products and Systems Integration backlog.

Adjusted operating margin expanded to 30.5% from 30.4% in the year-ago quarter, aided by higher sales and lower direct material costs, partially offset by the revenue reduction for Airwave.

Adjusted operating earnings rose 6% Y/Y to $870 million, and adjusted EPS of $3.90 surpassed the consensus of $3.63.

Operating and free cash flow were both $1.2 billion in the quarter, aided by higher earnings and partially offset by higher cash taxes.

During the quarter, the company paid $146 million in dividends and repurchased shares worth $117 million. During the quarter, Motorola Solutions disclosed a $2.0 billion increase to its share repurchase authorization.

Outlook: Motorola Solutions expects first-quarter adjusted EPS of $2.50-$2.55 vs. $2.37 estimate and 2024 adjusted EPS of $12.62-$12.72 vs consensus of $12.68.

The company expects revenue growth of approximately 8% for the first quarter and about 6% for 2024.

This week, Motorola Solutions penned a strategic, multi-year agreement with Google Cloud to focus on innovating cloud solutions across Motorola Solutions’ safety and security technologies. 

Also Read: Motorola’s Latest Tech Leap: The V500 Body Camera Brings Real-Time Insight For First Responders

Price Action: MSI shares are trading lower by 3.19% at $317.87 premarket on the last check Friday.