UPDATE: Tigress Downgrades Motorola On Declining Performance
In a report published Friday, Tigress Financial analyst Ivan Feinseth downgraded Motorola Solutions (NYSE: MSI) from Buy to Neutral on the company's declining business performance and revenue trend.
Feinseth noted that the phasing out of the iDEN network and government sale will continue to weaken business performance and place pressure on operating margins. The analyst added that Sprint's phase out of the iDEN network is expected to take three to four years.
Although the firm expects Motorola to regain market share in the government communication industry from securing the Zebra and other deals, near-term pressure will weigh on shares. The government business, which currently makes up 67 percent of sales, is expected to decrease by 10 percent in the second quarter of 2014 and low to mid-single digits by the year end.
Tigress expects Motorola to increase its dividend and share repurchase program. The analyst added that new product innovations could benefit the company.
Shares of Motorola closed Friday at $66.00, down 0.68 percent.
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