Motorola Solutions(US:MSI)2022-02-10 07:46Financial Data and Key Metrics Changes - Q4 revenue was $2.3 billion, up 2%, including $10 million from acquisitions and $6 million from favorable currency [13] - GAAP operating earnings were $549 million with operating margins at 23.7%, compared to 24.4% in the previous year [13] - Non-GAAP operating earnings were $670 million, up $3 million, with non-GAAP operating margins at 28.9%, down 40 basis points due to higher operating expenses [13] - For the full year, revenue was $8.2 billion, up 10%, with GAAP operating earnings at $1.7 billion, or 20.4% of sales, compared to 18.7% in the prior year [15] - Non-GAAP earnings per share was $9.15, up 19% from $7.69 in 2020 [16] Business Line Data and Key Metrics Changes - Products and Systems Integration Q4 sales were $1.5 billion, down 1%, impacted by supply constraints [21] - Software and Services Q4 revenue was $824 million, up 8%, driven by growth in LMR services and video security software [24] - For the full year, Software and Services revenue was $3.1 billion, up 13%, with operating earnings at $1.1 billion or 36.4% of sales, up 210 basis points [26] Market Data and Key Metrics Changes - North America Q4 revenue was $1.6 billion, up 4%, while international revenue was $705 million, down 3% [27] - For the full year, North America revenue was $5.6 billion, up 11%, and international revenue was $2.6 billion, up 9% [27] Company Strategy and Development Direction - The company aims for approximately 7% sales growth in 2022, with mid-single-digit growth in Products and Systems Integration and about 10% growth in Software and Services [31] - Continued investment in video security and command center software is a priority, with recent acquisitions enhancing capabilities [35] - The company is navigating supply chain challenges, particularly in semiconductor procurement, while maintaining strong demand across all technologies [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand and backlog, with a record backlog of $13.6 billion, up 19% year-over-year [10][28] - The supply chain environment remains challenging, particularly due to semiconductor shortages, impacting margins in Q1 and Q2 [36][90] - The funding environment for customers is strong, with significant opportunities from government contracts and stimulus funding [75][76] Other Important Information - The company returned approximately $1 billion to shareholders through share repurchases and dividends in 2021 [35] - The effective tax rate for 2021 was 21%, compared to 20% in the prior year [17] Q&A Session Summary Question: Can you talk about the Airwave extension and its economics? - The Airwave contract was extended by 4 years at existing pricing, reflecting its importance for British first responders [44] Question: What is the outlook for the video security market? - Video security and access control grew 32% in 2021, with expectations for approximately 20% growth in 2022 [47] Question: Are there supply chain issues beyond semiconductors? - The primary challenges are related to semiconductors, with elevated freight costs also impacting the supply chain [70] Question: How does the backlog pricing work? - Backlog pricing is largely fixed and cannot be repriced, which will impact margins in Q1 and Q2 [60] Question: What is the impact of the criminal actions against Hytera? - The criminal indictment against Hytera is expected to increase pressure on them, potentially affecting their operations in the U.S. [95]