Stock Analysis on Net
Stock Analysis on Net

Motorola Solutions Inc. (NYSE:MSI)

This company has been moved to the archive! The financial data has not been updated since August 1, 2024.

Common-Size Income Statement 

Motorola Solutions Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net sales from products 58.27 58.91 56.37 55.13 60.17
Net sales from services 41.73 41.09 43.63 44.87 39.83
Net sales 100.00% 100.00% 100.00% 100.00% 100.00%
Costs of products sales -25.97 -28.48 -25.75 -25.25 -25.98
Costs of services sales -24.22 -25.11 -24.81 -26.09 -24.18
Costs of sales -50.19% -53.59% -50.56% -51.34% -50.16%
Gross margin 49.81% 46.41% 49.44% 48.66% 49.84%
Selling, general and administrative expenses -15.64 -15.91 -16.56 -17.44 -17.79
Research and development expenditures -8.60 -8.55 -8.98 -9.25 -8.71
Intangibles amortization -1.77 -2.82 -2.89 -2.90 -2.64
Reorganization of businesses -0.22 -0.20 -0.29 -0.77 -0.51
Legal Settlements -0.04 -0.25 -0.04 -0.12 -0.04
Fixed asset impairments -0.03 -0.13 0.00 -0.07 0.00
Gain on sale of property, plant, and equipment 0.00 0.00 0.00 0.67 0.00
Environmental reserve expense -0.15 0.00 0.00 0.00 0.00
Exit of video manufacturing operations -0.24 0.00 0.00 0.00 0.00
Operating lease asset impairments -0.06 -0.26 -0.12 0.00 -0.06
Acquisition-related transaction fees -0.07 -0.25 -0.18 -0.12 -0.04
Gain on Hytera legal settlement 0.00 0.16 0.00 0.00 0.00
Other 0.01 0.03 0.02 -0.01 -0.01
Other charges -2.58% -3.72% -3.50% -3.32% -3.30%
Operating earnings 22.99% 18.23% 20.40% 18.65% 20.05%
Interest expense -2.50 -2.63 -2.63 -3.14 -3.00
Interest income 0.33 0.15 0.09 0.18 0.22
Interest expense, net -2.16% -2.48% -2.55% -2.97% -2.79%
Gains (losses) on sales of investments and businesses, net 0.00 0.03 0.01 -0.03 0.06
Net periodic pension and postretirement benefit 0.99 1.35 1.51 1.09 0.99
Loss from the extinguishment of long-term debt 0.00 -0.07 -0.22 -0.76 -0.63
Gains from the extinguishment of 2.00% senior convertible notes 0.00 0.00 0.00 0.00 0.05
Investment impairments -0.16 -0.01 0.00 -0.05 -0.23
Foreign currency gain (loss) -0.53 0.41 0.21 -0.59 -0.28
Gain (loss) on derivative instruments 0.20 -0.67 -0.37 0.34 -0.10
Gains (loss) on equity method investments 0.00 -0.03 0.06 0.04 0.04
Fair value adjustments to equity investments 0.13 -0.33 -0.10 0.08 -0.04
Gain on TETRA Ireland equity method investment 0.00 0.23 0.00 0.00 0.00
U.S. pension settlement 0.00 0.00 0.00 0.00 -4.55
Other 0.05 -0.03 0.04 0.03 0.13
Other, net 0.68% 0.85% 1.13% 0.18% -4.63%
Other expense -1.48% -1.60% -1.41% -2.82% -7.35%
Net earnings before income taxes 21.51% 16.63% 18.99% 15.83% 12.69%
Income tax expense -4.33 -1.62 -3.70 -2.98 -1.65
Net earnings 17.18% 15.00% 15.30% 12.85% 11.04%
Earnings attributable to noncontrolling interests -0.05 -0.04 -0.06 -0.05 -0.04
Net earnings attributable to Motorola Solutions, Inc. 17.13% 14.96% 15.24% 12.80% 11.01%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Net Sales Composition
The proportion of net sales derived from products showed a decline from 60.17% in 2019 to 55.13% in 2020, then slightly increased to a peak of 58.91% in 2022, before marginally dipping to 58.27% in 2023. Conversely, net sales from services rose from 39.83% in 2019 to 44.87% in 2020, followed by a gradual decrease to 41.09% in 2022, and a slight increase to 41.73% in 2023, indicating a shifting mix with fluctuations between product and service sales.
Cost Structure
Costs of product sales as a percentage of net sales largely remained stable around the mid- to high-20% range, with a notable spike to 28.48% in 2022 before reverting to 25.97% in 2023. Costs of services sales fluctuated modestly between 24.18% and 26.09%, with a slight decrease in 2023. Total costs of sales increased to 53.59% in 2022, the highest over the period, then improved to 50.19% in 2023. This pattern suggests variability in cost efficiency, especially in 2022.
Profitability Margins
Gross margin showed a downward trend in 2020 and 2022, dropping to 46.41%, before recovering strongly to 49.81% in 2023, approaching the 2019 margin of 49.84%. Operating earnings experienced fluctuation, dipping to 18.65% in 2020 and 18.23% in 2022, but recovering significantly to 22.99% in 2023, the highest in the given years. Net earnings followed a steady upward trajectory, rising from 11.04% in 2019 to 17.18% in 2023, reflecting improving overall profitability.
Expense Management
SG&A expenses steadily decreased as a percentage of net sales, from 17.79% in 2019 to 15.64% in 2023, indicating improved operational efficiency. Research and development expenditures remained relatively stable, fluctuating slightly around 8.5% to 9.25%, with a minor improvement (decrease) in 2023. Intangibles amortization decreased notably, from 2.64% in 2019 to 1.77% in 2023, suggesting either reduced amortization expenses or write-downs over time.
Special Charges and Gains
Other charges consistently ranged between approximately -3.3% and -2.58%, with a reduction noted in 2023, pointing to lower exceptional costs or write-offs. Legal settlements and impairments showed sporadic impacts, generally minor in scale, though impairments peaked at -0.13% in 2022 before decreasing. Gains on sales of assets were irregular but contributed positively in 2020. The exit of certain operations and environmental reserve expenses appeared only from 2023, exerting modest negative impacts.
Interest and Financing
Net interest expense as a percentage of net sales improved from -2.79% in 2019 to -2.16% in 2023, reflecting a gradual reduction in financing costs relative to revenue. Interest income saw a small increase in 2023, while interest expense remained fairly stable. Losses from the extinguishment of long-term debt declined significantly from -0.63% in 2019 to near zero in later years, enhancing the net interest position.
Other Income and Expenses
Gains and losses on investments, foreign currency, and derivative instruments exhibited volatility, with foreign currency swings being positive in 2021 and 2022 but negative in 2023. The net effect of other charges and income items improved notably from -7.35% in 2019 to approximately -1.48% in 2023, suggesting better control over miscellaneous expenses.
Taxation and Earnings
Income tax expenses fluctuated but spiked in 2023 at -4.33%, up from -1.62% in 2022, impacting net earnings. Despite this, net earnings before tax peaked at 21.51% in 2023, the highest in the timeframe, supporting an overall strong net earnings figure of 17.18% in 2023, reflecting robust profitability improvement.
Summary of Trends
The data reveals a general trend toward enhanced profitability and improved expense management over the five-year period. Although there were periodic cost pressure points, particularly in 2022 manifesting in higher costs of sales and lower margins, recovery was evident in 2023. The balanced evolution of product and service sales contributions, alongside declining SG&A and stabilization of R&D spending, underpin operational improvements. Financing costs reduced as a share of net sales, and other income and loss volatility decreased, contributing to stronger earnings performance. Income tax volatility represents an area of focus but has not impeded the overall positive earnings trajectory.