Strong spending by governments to improve public safety and retailers helped Motorola Solutions Inc., report strong gains in fourth-quarter earnings and revenues.
The report did little for the company’s share price, however, because of the Schaumburg-based company’s weaker first-quarter earnings guidance. Shares of Motorola Solutions, formerly the Enterprise Mobility Solutions segment of Motorola Inc. before it split earlier this month, closed at $38.58 Thursday on the New York Stock Exchange, down 1.68 percent.
Motorola Solutions on Thursday reported pro forma fourth-quarter operating earnings of $279 million, a 12 percent gain from the $250million in the year-ago period.
Quarterly sales rose 13 percent, to $2.2 billion, led by increases of 9 percent and 23 percent in its government and enterprise groups, respectively.
Government spending, which represents 65 percent of Motorola Solutions’ overall sales mix, included a $345 million contract in Maryland and other multimillion-dollar contracts in New Jersey, Louisiana, Mississippi and Minnesota, and one in DuPage County.
Public safety “continues to bubble to the top,” CEO Greg Brown told analysts Thursday during a conference call. “Even in areas where first responders are being reduced, we’re seeing spending on public safety being fairly constant and that’s because we sell more than radios.”
In a later interview, Brown noted that technology doesn’t put out fires but products like video surveillance make technology a “virtual first responder.”
Brown said the impressive growth on the enterprise side in 2010 was due in part to firms’ ability to spend again as they waded out of the recession.
New contracts in the company’s enterprise business, which includes mobile computers and radio frequency identification technology, included a $15 million contract with Hermes in Germany and another with TNT Express in Holland.
Looking ahead, the company said it anticipates overall revenue growth of 3 to 4 percent in 2011 and earnings per share of 29 cents to 34 cents, led by high-single-digit percentage gains in its enterprise unit and low-single-digit gains in the government business. The company said it plans to retire $600 million of debt that comes due in November.
Brown said the company still expects to complete the sale of its wireless networks unit to Nokia Siemens Networks during the first quarter, a transaction that will produce net proceeds of $1.1 billion.
On Monday, Chinese telecommunications company Huawei Technologies Co. sued Motorola and Nokia Siemens in an effort to stop the sale.
Brown said he was not surprised by the lawsuit and he does not think it will delay the transaction.
“I view the litigation as isolated and separate from our selling the networks business,” he said. “The lawsuit is just maneuvering and jockeying and has no merit at all.”
