Motorola Solutions: Strong sales of communications gear to industrial customers helped propel Motorola Solutions Inc.’s earnings in the first quarter, with the Schaumburg-based company reporting net profit of $497 million, up from $69 million a year ago.
Total sales were $1.88 billion, an increase of 8 percent from the first quarter of 2010. Sales for the enterprise business jumped 14 percent on the year, to $695 million. Government sales rose a more modest 5 percent, to $1.19 billion.
Motorola Solutions’ surge in net profit was boosted by the increase in sales, as well as an income tax benefit, earnings from discontinued operations and what company officials characterized as aggressive cost reductions.
The performance beat analyst estimates, driving up the share price more than 7 percent, to $46.66.
Chief Executive Greg Brown said that while government spending in Western Europe and the U.S. remains sluggish, agencies are willing to spend money on technology upgrades for public safety systems.
“Tax revenues are increasing again and approaching 2008 levels, which is a positive thing,” Brown told the Tribune in an interview. He added: “We do think that the consistent performance (of the government business) so far has demonstrated the resiliency and priority of public safety. But we will always have to watch this closely. … We don’t want to assume anything.”
Motorola Solutions also said it expects to close the delayed sale of its networks business to Nokia Siemens Networks on Friday. Discontinued operations, consisting mostly of the networks business, generated $132 million in net earnings in the first quarter. Motorola Solutions and Nokia amended their deal earlier this month, reducing the cash purchase price for the networks business to $975 million from $1.2 billion.
Brown said the reduced price does not have a significant impact on Motorola Solutions’ financial picture. The company expects the sale to generate net cash proceeds of $1 billion after taxes and various fees.
Motorola Mobility: Motorola Mobility Holdings Inc. posted a net loss of $81 million for the first quarter, narrowing its year-earlier loss of $212 million amid a 22 percent increase in revenue.
Libertyville-based Motorola Mobility said it shipped 9.3 million mobile devices during the quarter, including 4.1 million smartphones and more than 250,000 Xoom tablets. In the first quarter of 2010, the company had shipped 2.3 million smartphones and a total of 8.5 million mobile devices.
The company released earnings after the market’s close; in early after-hours trading, Motorola Mobility’s shares rose more than 3 percent, to $24.80.
Motorola Mobility faced pressure from Apple in the latest period, as the Cupertino, Calif.-based company launched the iPhone at Verizon Wireless and sold 4.7 million iPads.
“We had shipped (the Xoom) late in February, so we only had about five to six weeks of sell-through opportunity there, but we’re pleased with the levels of stock in channel at the end of the quarter,” Chief Financial Officer Marc Rothman said in a conference call with analysts.
Revenue for the mobile devices business totaled $2.1 billion, an increase of 30 percent from a year ago.
Chief Executive Sanjay Jha said the 4G version of the Xoom, as well as the Droid Bionic, a 4G smartphone for Verizon, will be launched in the summer rather than in the second quarter as originally planned. Jha said both rescheduled launches were related to 4G software performance issues and that Motorola Mobility decided to change some of the features on the Bionic.
“There’s always a balance between being the first and getting all the feature sets right,” Jha told the Tribune. “That was really one of the choices we faced. We thought it was better for us to take a little more time and make sure the network performance was right.”
Motorola Mobility’s Home segment, which makes cable TV set-top boxes, saw revenue rise 8 percent, to $904 million, in the first quarter.
Meanwhile, Jha told the Tribune he expects to make a decision about the company’s headquarters in the next few weeks. Motorola Mobility is considering several cities in California and Texas, in addition to its current home of Libertyville.
