Motorola Solutions, Inc

Motorola delivered a strong quarterly result with growth across all three core technologies and delivered an all-around beat. Its supply chain execution during the quarter allowed it to ship more product revenue, which helped LMR grow by 9%. During the quarter, the company completed the acquisition of Barrett Communications. The Products and SI segment continues to experience high demand for both LMR and video, which brings them to segment performance. Strong order demand in LMR and video also continues to generate record backlog in the Products and SI business, which was up $1.2 billion or 35% from the previous year. For the ninth quarter, this segment’s backlog increased sequentially, growing by $513 million. The Airwave extension and a $288 million increase in multiyear services and software contracts in North America drove an $876 million increase in the backlog for software and services compared to last year. However, this increase was only partially offset by a $722 million negative FX impact and the adjustment for ESN. Overall, the company is well-positioned with its long-term strategies. We maintain our ‘Hold’ rating with a revised target price.