Motorola Solutions reported its earnings results for the second quarter of 2015. Sales declined 2 percent, including $53 million of unfavorable foreign currency impact.
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Sales increased 2 percent in constant currency. These results reflect 5 percent growth in North America driven by increased product sales. Overall product sales declined 2 percent due to currency headwinds and weakness in Europe and Africa and Latin America, while Services declined 1 percent primarily due to unfavorable currency impact and lower iDEN revenue.
GAAP operating margin was 18.6 percent of sales in the second quarter of 2015, compared with 9.9 percent in the second quarter of 2014; non-GAAP operating margin was 19.0 percent of sales, compared with 14.4 percent in the second quarter of 2014.
These results were driven by $69 million in lower operating expenses compared with the second quarter of 2014, due largely to cost reduction and simplification initiatives across all categories as well as lower pension expense and a stronger dollar.
The second quarter of 2015 GAAP effective tax rate was 30 percent. This compares with a tax rate of 20 percent in the second quarter of 2014, which included $30 million of net tax benefit associated with the net reduction in previously unrecognized tax benefits.
The second quarter of 2015 non-GAAP tax rate was 35 percent, compared with a tax rate of 25 percent in the second quarter of 2014. The full-year non-GAAP tax rate is expected to be approximately 33 percent. The full-year cash tax rate3 is expected to be approximately 15 percent.
The company generated $140 million in operating cash from continuing operations during the quarter, reflecting an increase of $22 million over the prior year.
Free cash flow was $92 million in the quarter. The increase was largely driven by improved earnings and lower pension contributions.
The company ended the quarter with cash and cash equivalents of $3.1 billion and a net debt position of approximately $300 million4. The company repurchased $285 million of common stock in the second quarter of 2015 and paid $72 million in cash dividends.
The company grew sequential backlog for the third straight quarter, ending at $6 billion. These results were primarily due to growth in North America, Asia Pacific and the Middle East regions. ■