Motorola Solutions is scheduled to report its Q4 2015 earnings on Monday, February 22nd, and we expect the company’s results to be impacted by macroeconomic headwinds in Latin America, Europe and Africa. Also, a decline in iDEN services and Norway implementation wind-downs will negatively affect Motorola’s results, while a solid order backlog in North America can have a marginal offsetting impact. With consistent innovation, the company won some contracts during the third quarter of the year, which should help its revenues in the fourth quarter and beyond. However, Motorola warned about waning demand in Latin America and Eastern Europe on account of government agencies’ budget cuts and the strengthening dollar, guiding its fourth quarter results below estimates. For the recently concluded quarter, the company expects revenues to decline 6-8% (much worse than the 1% decline seen in Q3) with EPS at $1.45-1.50, well below the consensus estimates of $1.57. Nevertheless, it must be noted that Motorola’s EPS guidance reflects a year over year (y-o-y) improvement of 15-20%, which is attributable to the company’s cost cutting initiatives. At the start of 2015, Motorola had planned to save $175 million in operating costs in 2015, and by the end of Q3, it had raised the annual target to $200 million.

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