Seeking Alpha
Long/short equity, contrarian, short-term horizon, dividend investing
Profile| Send Message|
( followers)  

Motorola Solutions Inc (NYSE:MSI) is scheduled to release last fiscal quarter's results (forth quarter) before the opening bell on January 25, 2012. Let's take a look at how Motorola Solutions Inc has done in recent quarters.

Motorola Solutions, Inc. provides business and mission critical communication products and services for enterprise and government customers worldwide. The company was founded in 1928 and is based in Schaumburg, Illinois. MSI trades an average of 1.7 million shares per day.

52 Week High: $48.05
52 Week Low: $37.06
Book Value: $18.73
Float Short: 1.28%

Analysts are expecting an improvement of $0.09 in earnings per share compared to last quarter's results of $0.65. The number to beat is $0.74 per share, based on the estimated mean earnings. Analyst estimates range between $0.71 and $0.77 per share.

The current trailing twelve months P/E ratio is 19.8. The forward P/E ratio is 18.69. Investors have to love the chart pattern. A total trend follower paradise with the key 200 day moving average gliding upwards at a moderate pace. The slower 60 and 90 day averages are also moving higher with the 90 day just recently breaking above the 200 day. The earnings multiple is a little rich for my taste though and I would wait for a pullback to buy or add.

Those wanting to protect and or take some gains off the table may want to look into selling some $45 or $50 February strike price call options. For a greater hedge a back month option series may make the most sense. Obviously the name Motorola is well known, but with Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) as viable alternatives in technology, I believe it's difficult to make a case for buying in what appears to be the top of the price channel.

For the same fiscal period year-over-year, revenue has improved to $19.28 billion for 2010 vs. $18.15 billion for 2009. The bottom line has rising earnings year-over-year of $633.00 million for 2010 vs. $-51.00 million for 2009. The company's earnings before interest and taxes are rising with an EBIT year-over-year of $789.00 million for 2010 vs. $-492.00 million for 2009. Rising revenue along with rising earnings is a very good sign and what we want to see with our companies. Be sure to check the margins to make sure that the bottom line is keeping up with the top line.

Here is a look at the fiscal year revenue.
paid2trade.com revenue gross bar chart for MSI

Gross reported revenue compared to the mean estimate (rounded).

Fiscal Quarter Ending Month-YearRevenue EstimatesActual$ DifferenceDifference %
Sep-11$ 2.10 B$ 2.10 B$ 8.69 M0.41%
Jun-11$ 2.03 B$ 2.06 B$ 29.00 M1.43%
Mar-11$ 1.81 B$ 1.88 B$ 78.92 M4.37%
Dec-10$ 5.48 B$ 5.66 B$ 178.31 M3.25%
Sep-10$ 5.65 B$ 5.76 B$ 115.57 M2.05%

M = millions, B = billions

Differences are rounded. (Some onetime items are often excluded in reported EPS)
paid2trade.com Quarterly Estimates And Actual EPS results MSI
Reported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for MSI. Looking at the days to cover paints a slightly different picture though.
paid2trade.com short interest tool. The total short interest number of shares for MSI

The number of days to cover short interest based on average daily trading volume for MSI.
paid2trade.com number of days to cover short interest based on average daily trading volume for MSI

Rockwell Automation (NYSE:ROK) is anticipated to report first quarter earnings before the opening bell on January 25, 2012.

Rockwell Automation, Inc. provides industrial automation power, control, and information solutions. It operates in two segments, Architecture and Software, and Control Products and Solutions. The company was founded in 1928 and is headquartered in Milwaukee, Wisconsin. ROK trades an average of 1.2 million shares per day.

52 Week High: $98.19
52 Week Low: $50.36
Book Value: $12.32
Float Short: 1.79%

On average, analysts are expecting a drop of $-0.18 in earnings per share compared to last quarter's results of $1.39. The reporting quarter's estimated mean earnings are $1.21 per share. Analyst estimates range between $1.14 and $1.30 per share.

The current trailing twelve months P/E ratio is 16.9. The forward P/E ratio is 15.32. Rockwell pays a strong 2.1% dividend of $1.70 and recently broke through the all important 200 day moving average (likely the most heavily watched technical indicator beyond price and volume there is). The shorter moving averages are still lagging after the tough third quarter (calendar) investors endured last year. Like Motorola I would be looking to take some off the table by selling some call options to grab the relatively rich premium before earnings. I would hold out for a pullback to add shares as well.

For the same fiscal period year-over-year, revenue has improved to $6.00 billion for 2011 vs. $4.86 billion for 2010. The bottom line has rising earnings year-over-year of $697.80 million for 2011 vs. $464.30 million for 2010. The company's earnings before interest and taxes are rising with an EBIT year-over-year of $927.10 million for 2011 vs. $604.70 million for 2010. Rising revenue along with rising earnings is a very good sign and what we want to see with our companies. Be sure to check the margins to make sure that the bottom line is keeping up with the top line.

Here is a look at the fiscal year revenue.
paid2trade.com revenue gross bar chart for ROK

Gross reported revenue compared to the mean estimate (rounded).

Fiscal Quarter Ending Month-YearRevenue EstimatesActual$ DifferenceDifference %
Sep-11$ 1.55 B$ 1.65 B$ 105.33 M6.8%
Jun-11$ 1.48 B$ 1.52 B$ 36.15 M2.44%
Mar-11$ 1.41 B$ 1.46 B$ 55.98 M3.98%
Dec-10$ 1.30 B$ 1.37 B$ 68.72 M5.3%
Sep-10$ 1.32 B$ 1.36 B$ 40.11 M3.05%

M = millions, B = billions

Differences are rounded. (Some onetime items are often excluded in reported EPS)
paid2trade.com Quarterly Estimates And Actual EPS results ROK
Reported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for ROK
paid2trade.com short interest tool. The total short interest number of shares for ROK

The number of days to cover short interest based on average daily trading volume for ROK.
paid2trade.com number of days to cover short interest based on average daily trading volume for ROK

Thank you for reading my article. Please also feel free to share your thoughts and comments.

I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, and Yahoo Finance for most of my data. I use the "confirmed" symbols from earnings.com that I believe to be of the most interest.

Source: Earnings Preview: Motorola Solutions And Rockwell Report Results Wednesday