Motorola Faces Stock Decline As Increased Tariff-Related Costs Weigh On 2025 Outlook

Motorola Solutions, Inc MSI stock is trading lower Friday after the company released its quarterly results on Thursday.

The company reported first-quarter revenue growth of 6% year-on-year to $2.53 billion, beating the analyst consensus estimate of $2.52 billion.

Adjusted EPS of $3.18 beat the analyst consensus estimate of $3.01.

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The topline was driven by growth in North America, partially offset by a decline internationally due to foreign currency headwinds and lower Ukraine revenue.

Products and Systems Integration sales grew by 4%.

Software and Services sales increased by 9%.

The adjusted operating margin was 28.3%, up 160 basis points, driven by higher sales, a favorable mix, and lower direct material costs, partially offset by acquisitions.

The company ended the quarter with a backlog of $14.1 billion, down 2% Y/Y. It also generated an operating cash flow of $510 million during the quarter compared to $382 million Y/Y.

Motorola Solutions expects increased costs on materials and components in 2025 due to the Trump administration’s tariff policies.

Outlook:  Motorola Solutions expects second-quarter revenue growth of approximately 4% Y/Y or $2.73 billion (versus analyst consensus estimate of $2.77 billion) and adjusted EPS of $3.32-$3.37 (versus analyst consensus estimate of $3.47).

The company reiterated fiscal 2025 revenue growth of approximately 5.5% Y/Y or $11.41 billion (compared to the analyst consensus estimate of $11.43 billion) and adjusted EPS of $14.64-$14.74 (compared to the analyst consensus estimate of $14.72).

Price Action: MSI stock is down 8.20% at $403.40 at last check Friday.

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