Motorola Solutions Inc, best known as a maker of walkie-talkies and radio systems, blamed weak sales in Latin America and a strong dollar for a profit forecast for the current quarter that fell far short of expectations.
Motorola Solutions - unrelated to cellphone and set-top box maker Motorola Mobility, which is owned by China's Lenovo - has been slashing costs due to sluggish sales.
The company's major customers include police and fire departments as well as other government agencies, which have been hit by budget cuts.
The Schaumburg, Illinois-based company, which also provides communication services to governments, businesses and public safety agencies, has faced particular problems in Latin America, which accounted for about 9 percent of its sales in 2014.
Apart from the strong dollar, the company has been hit by weak sales of products such as two-way portable radios in Latin America as well as a decline in demand for some hardware and software maintenance services in the region.
Motorola Solutions said on Wednesday it expected a profit of $1.45 to $1.50 per share from continuing operations excluding items in the current quarter, well below the average analyst estimate of $1.57, according to Thomson Reuters I/B/E/S.
The company said its total revenue is expected to decline by 6 to 8 percent in the quarter.
Overall revenue fell about 1 percent to $1.42 billion in the third quarter ended Oct. 3. Excluding the impact of the strong dollar, sales increased 3 percent.
The average value of the dollar against a basket of currencies was about 17 percent higher in the quarter compared with the same quarter last year.
Motorola Solutions said earlier this year that private equity firm Silver Lake would invest $1 billion in the company to boost its services business.
Net income from continuing operations attributable to Motorola Solutions rose to $126 million, or 63 cents per share, from $66 million, or 27 cents per share, a year earlier. Costs fell 1.9 percent to $737 million.
Revenue from North America, the company's biggest market, rose 5 percent, helped by strong demand from the U.S. government.
Excluding items, the company earned 82 cents per share from continuing operations. Analysts on average had expected earnings of 73 cents per share and revenue of $1.41 billion.
Up to Tuesday's close of $71.36, Motorola Solutions' shares had risen 6.4 percent this year. The stock was little changed in premarket trading on Wednesday.
Reuters
