Communications gear maker Motorola Solutions Inc reported a better-than-expected quarterly profit, helped by government spending on public safety, and expects double-digit percentage growth in the business to continue through 2013.<\/p>\n
The U.S. government has been cutting discretionary spending, hurting companies such as IBM, AT&T Inc and Xerox Corp, but has been spending on public safety, where Motorola gets a major part of its revenue.<\/p>\n
“Government spending may move up or move down but (spending on) public safety has been quite constant and remains strong,” Chief Executive Greg Brown told Reuters.<\/p>\n
Motorola, which dominates the two-way radio market with its land-mobile-radio systems, also makes several other public safety products including advanced video security systems.<\/p>\n
Government business grew 12 percent in the third quarter and accounted for 65 percent of the company’s revenue last year.<\/p>\n
Motorola, whose shares were up 4 percent early afternoon trading, also gained from a regulatory mandate to convert existing wideband two-way radio channels to narrow bands by January 1, 2013. The conversion accounted for about 3 percent of the growth in government business in the third quarter.<\/p>\n
The company raised its full-year 2012 sales growth outlook to between 6 and 6.5 percent from the 5 to 6 percent range it forecast earlier to reflect revenue from the Psion Plc acquisition.<\/p>\n
Psion will add about $60 million to revenue in the fourth quarter, Brown said.<\/p>\n
However, the company forecast current-quarter earnings largely below market estimates.<\/p>\n
The company expects fourth-quarter earnings of 98 cents to$1.03 per share from continuing operations on sales growth of 6 percent to 7 percent.<\/p>\n
Analysts on average were expecting earnings of $1.02 per share, according to Thomson Reuters I\/B\/E\/S.<\/p>\n
Net income rose to $206 million, or 72 cents per share, in the third quarter, from $128 million, or 38 cents per share, a year earlier.<\/p>\n
Excluding items, the company earned 84 cents per share from continuing operations.<\/p>\n
Revenue rose 3 percent to $2.20 billion.<\/p>\n
Analysts on average had expected earnings of 73 cents per share on revenue of $2.15 billion.<\/p>\n
Motorola Solutions is not related to Motorola Mobility, the cellphone maker bought by Google Inc for $12.5 billion last year.<\/p>\n
Shares of the Schaumburg, Illinois-based company were trading at $51.79 on the New York Stock Exchange.<\/p>\n
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