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MOTOROLA SOLUTIONS INC. (New York symbol MSI; www.motorolasolutions.com) took its current form on January 4, 2011, when the old Motorola Inc. spun off its struggling cellphone business, Motorola Mobility, as a separate firm. The remaining operations became Motorola Solutions after the breakup.
The company makes specialized communications equipment, such as radios for police and fire vehicles. Government clients account for about 70% of its revenue.

Motorola Solutions recently agreed to sell its enterprise division, which provides the remaining 30% of its revenue. This business makes bar-code scanners and interactive kiosks for corporate clients.

The buyer, Zebra Technologies Corp. (Nasdaq symbol ZBRA), will pay $3.45 billion when the deal closes, probably before the end of 2014.

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Tech stocks: Motorola Solutions sees sales rise strongly in Europe and Latin America

The company’s focus on government clients could slow its growth, particularly as many U.S. cities and states are struggling to control their costs. But it is a market leader, which helps cut its risk.

Excluding the enterprise division, Motorola Solutions earned $78 million in the three months ended June 28, 2014, down 65.0% from $223 million a year earlier. The company spent $416 million on share buybacks in the latest quarter. As a result, per-share earnings fell 63.0%, to $0.30 from $0.81.The drop is largely due to unusual tax credits that boosted earnings in the year-earlier quarter by $0.47 a share.

Without costs related to the sale and other unusual items, earnings per share were unchanged at $0.47, falling well short of the consensus estimate of $0.62.
Revenue fell 6.9%, to $1.4 billion from $1.5 billion. That’s mainly because the U.S. government is spending less on new equipment as it deals with its budget deficit. However, sales rose strongly in Europe and Latin America.

Motorola Solutions continues to reduce costs at its remaining operations, mainly through job cuts. It now expects these moves to save it a total of $300 million by the end of 2015, up from its previous estimate of $200 million.

The company has also increased its quarterly dividend by 9.7%, to $0.34 a share from $0.31. The new annual rate of $1.36 yields 2.2%.
Motorola Solutions is a buy recommendation of our advisory on U.S. stocks, Wall Street Stock Forecaster.

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Our most recent Best U.S. Stocks reported on the tech stock with the longest history of success in the industry. You can read the article here.