NEW YORK (TheStreet) -- Shares of Motorola Solutions (MSI) dipped in afternoon trading Monday ahead of the company's scheduled third-quarter earnings report Tuesday before the market open. Here's what analysts are expecting from the telecommunications equipment provider.
The consensus estimate calls for Motorola to report earnings of 41 cents a share on revenue of $1.39 billion. In the third quarter last year, Motorola posted earnings of $1.32 a share, which handily beat analysts' expectations of $1.02 a share. Revenue totaled $2.11 billion, which came up just short of the consensus estimate of $2.12 billion.
In the second quarter of 2014, Motorola reported earnings of 47 cents a share, which came up short of analysts' estimate of 63 cents a share. Revenue totaled $1.39 billion, which came up well short of the consensus estimate of $1.96 billion.
Must Read: Warren Buffett's 25 Favorite Stocks
Separately, TheStreet Ratings team rates MOTOROLA SOLUTIONS INC as a "buy" with a ratings score of B. TheStreet Ratings 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 compelling growth in net income, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 219.4% when compared to the same quarter one year prior, rising from $258.00 million to $824.00 million.
- Net operating cash flow has significantly increased by 110.97% to $173.00 million when compared to the same quarter last year. In addition, MOTOROLA SOLUTIONS INC has also vastly surpassed the industry average cash flow growth rate of 7.14%.
- The gross profit margin for MOTOROLA SOLUTIONS INC is rather high; currently it is at 50.54%. Regardless of MSI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MSI's net profit margin of 59.15% significantly outperformed against the industry.
- MSI, with its decline in revenue, slightly underperformed the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 6.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.41 is sturdy.
- You can view the full analysis from the report here: MSI Ratings Report