Motorola Solutions Exceeds Estimates, Upgraded at Raymond James

In a report published Thursday, Raymond James analysts upgraded the rating on

from Underperform to Market Perform, after the company reported robust 1Q15 results. Motorola's 1Q15 revenues, at $1.2 billion, were flat year on year but ahead of the Raymond James estimate. Despite weaker gross margins, continued cost saving efforts and stronger revenues enabled the company to post a non-GAAP EPS of $0.38, significantly higher than the estimate. The company's gross margin declined on a year on year basis due to currency headwinds and a higher mix of installation services. "1Q results were better than expected and much better than feared given the forex headwind. Share repurchase was stronger, backlog was flat sequentially and y/y despite a $150 million forex headwind, which is a strong performance in a seasonally weak quarter for backlog trends. The impact of the LA-RICS (Los Angeles Regional Interoperable Communications System Authority) delay was also minimal," the analysts mentioned. The company maintained its full year guidance, despite the currency headwinds, taking into account its strong backlog performance in 1Q. Motorola continued to repurchase shares in 1Q, but the "pace is likely to slow," the analysts said. The non-GAAP EPS estimate for 2015 has been raised from $3.17 to $3.32, while the non-GAAP EPS estimate for 2016 has been reduced from $4.00 to $3.82, to reflect lower buyback assumptions.