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Will Top-Line Growth Benefit Motorola's (MSI) Q4 Earnings?

Motorola Solutions, Inc. MSI is scheduled to report fourth-quarter 2022 results on Feb 9, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 4.2%. It pulled off a trailing four-quarter earnings surprise of 6.6%, on average.

The Chicago, IL-based company is expected to have recorded year-over-year higher revenues on the back of growth in both segments — Products and Systems Integration, and Services and Software. It benefits from the increasing demand for its mission-critical technologies in North America and globally.

Factors at Play

During the quarter, Motorola inked a contract with Lithuanian National Police and Border Guard Service for 2,500 body-worn cameras for use by its security personnel. Its state-of-the-art VB400 body-worn cameras enable the capture of incidents from the start as it offers an automated pre-recording feature. The VideoManager evidence management solution enables a highly advanced solution for protecting the evidence present on video. It also proves useful to officers’ daily workflow. This is likely to have generated incremental revenues during the quarter.

In fourth-quarter 2022, Motorola secured the Joint Interoperability Test Command certification from the U.S. Defense Information Systems Agency for its Avigilon video security solutions. Its Federal Information Processing Standards-compliant video security and physical access control systems offer an end-to-end unified solution that meets the stringent privacy and security standards of the federal government. Leveraging real-time video analytics to increase the productivity of security personnel, the products facilitate effective monitoring to combat attention fatigue and resource constraints. This helps to secure people, assets and facilities spanning large perimeters of sensitive and high-security areas.

Riding on such state-of-the-art products, Motorola expects to record strong demand across video security and services, land mobile radio products and related software while benefiting from a solid foundation. These systems drive the demand for additional device sales and promote software upgrades and infrastructure expansion. The comprehensive suite of services ensures continuity and reduces risks related to critical communications operations. These developments are expected to have positively impacted its performance in the quarter.

The Zacks Consensus Estimate for the Products and Systems Integration segment’s revenues is pegged at $1,647 million. The figure indicates a rise from $1,495 million recorded in the year-ago quarter. The Zacks Consensus Estimate for the Services and Software segment’s revenues stands at $889 million, up from $825 million recorded in the year-earlier quarter.

For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $2,535 million, which indicates growth from the year-ago quarter’s reported figure of $2,320 million. The consensus estimate for adjusted earnings per share stands at $3.43, which suggests an increase from $2.85 recorded in the prior-year quarter driven by top-line growth.

Earnings Whispers

Our proven model does not predict an earnings beat for Motorola in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $3.43. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Motorola Solutions, Inc. Price and EPS Surprise

Motorola Solutions, Inc. Price and EPS Surprise
Motorola Solutions, Inc. Price and EPS Surprise

Motorola Solutions, Inc. price-eps-surprise | Motorola Solutions, Inc. Quote

Zacks Rank: Motorola carries a Zacks Rank #2.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Check Point Software Technologies Ltd. CHKP is set to release quarterly numbers on Feb 13. It has an Earnings ESP of +1.22% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Applied Materials, Inc. AMAT is +0.42% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 16.

The Earnings ESP for Cambium Networks Corporation CMBM is +9.27% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Feb 16.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report

Applied Materials, Inc. (AMAT) : Free Stock Analysis Report

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Cambium Networks Corporation (CMBM) : Free Stock Analysis Report

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