Why Motorola Solutions (MSI) is Sinking on Wednesday

NEW YORK (TheStreet) -- Motorola Solutions (MSI) was losing ground on Wednesday after warning of weakening revenue earlier in the day. By midday, shares had taken off 3.7% to $64.63.

The tech company, which develops business-centric and durable hardware, said profit over 2013 had increased slightly thanks to increased government sales. Fourth-quarter net income of $1.67 a share exceeded expectations of $1.62 a share according to analysts surveyed by Thomson Reuters. Revenue saw a year-over-year increase of 2.5% to $2.5 billion, broadly in-line with consensus.

However, lower-than-expected guidance for the first quarter ending March rattled Wall Street. The Schaumburg, Ill.-based business forecast a 4% to 6% drop in revenue compared to the year-ago quarter, putting sales in the range of $1.85 billion to $1.89 billion. Net earnings are expected between 46 cents and 52 cents a share.

The first-quarter guidance is significantly lower than analyst consensus of 75 cents a share in net income and $2.01 billion in sales.

TheStreet Ratings team rates MOTOROLA SOLUTIONS INC as a Buy with a ratings score of B+. The team has this to say about their recommendation:

"We rate MOTOROLA SOLUTIONS INC (MSI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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