Motorola Solutions, Inc. (NYSE:MSI) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 05:00 pm ET


Motorola Solutions, Inc. (NYSE:MSI) Q4 2018 Earnings Conference Call Transcript


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Good day, everyone, and welcome to the Motorola Solutions Q4 2018 Earnings Call. (Operator Instructions)

It is now my pleasure to turn today's program over to Mr. Chris Kutsor, Vice President of Investor Relations. Please go ahead, sir.

Chris Kutsor

Thank you, operator, and good afternoon, everybody. Welcome to our 2018 fourth quarter earnings call. With me today are Greg Brown, Chairman and CEO; Gino Bonanotte, Executive Vice President and CFO; Jack Molloy, Executive Vice President, Products and Sales; and Kelly Mark, Executive Vice President, Services and Software. Greg and Gino will review our results along with commentary and Jack and Kelly will join for Q&A. We've posted an earnings presentation and news release at These materials include GAAP and non-GAAP reconciliations for your reference. We reference non-GAAP financial results including those in outlook unless otherwise noted.

A number of forward-looking statements will be made during this presentation and during the Q&A portion of the call. These statements are based on current expectations and assumptions that are subject to a variety of risks and uncertainties. Actual results could differ materially from these forward-looking statements. Information about factors that could cause such differences can be found in today's earnings news release, in the comments made during this conference call, in the Risk Factors section of our 2017 annual report on Form 10-K and in our other reports and filings with the SEC. We do not undertake any duty to update any forward-looking statement.

With that, I'll it over to Greg.

Gregory Q. Brown

Thanks, Chris. Good afternoon, and thanks for joining us. I'll share a few thoughts about the overall business before Gino takes us through the results and the outlook. First, Q4 was another excellent quarter. We posted records for revenue, earnings per share, operating cash flow and backlog. Revenue grew 15%, earnings per share grew 25% and we generated operating cash flow of over $800 million. Second, our full-year results were outstanding as well and illustrate the earnings power of our business, driven by demand across our entire portfolio and continued strong execution.

For the full year, we grew revenue 15% earnings per share 31% and generated close to $1.6 billion of operating cash flow, excluding a voluntary pension contribution and grew our backlog by almost $1 billion. And finally, demand remained strong across our platforms and mission-critical communications, video, services and software, and we continue to invest for long-term growth. So, I'll now turn the call over to Gino to provide additional details on Q4 results and 2019 outlook before returning for some closing thoughts.

Gino A. Bonanotte

Thank you, Greg. Q4 results include revenue of $2.3 billion up $297 million or 15% from the year-ago quarter, including $159 million of revenue from acquisitions and $25 million of revenue related to the adoption of accounting standard 606. Organic revenue, which excludes acquisitions and the accounting change, was up 6%. GAAP operating earnings were $516 million, up $13 million, and operating margins were 22.9% of sales compared to 25.7% in the year-ago quarter. The lower operating margin