Motorola Solutions Cutting Costs on Weaker Sales Outlook

Motorola Solutions Inc., the bar-code and two-way radio manufacturer, fell the most in three months after lowering its sales forecast again on weak orders.

The shares dropped 6.6 percent to $56.04 at the close in New York after the company forecast full-year sales to be little changed or up 1 percent from 2012, according to a statement. Analysts had expected 3 percent sales growth this year, according to data compiled by Bloomberg. The stock decline was the biggest one-day slump since April 24.

Sluggish demand from business customers is the primary drag on sales, said Chief Executive Officer Greg Brown. The company had previously lowered its forecast for the year in April.

“It’s taking longer than we thought to recover,” Brown said in an interview. “Our customers are being more conservative around their spending, and we are feeling that.”

Motorola Solutions, based in Schaumburg, Illinois, said third-quarter adjusted earnings will be in the range of 97 cents to $1.02 a share, compared with the average analyst estimate of $1.25. The company said third-quarter sales may be little changed or decline as much as 3 percent, below the 5 percent gain forecast by analysts.

To adjust to the weaker sales outlook, the company is reducing operating expenses this year and expects to cut $50 million from operating costs next year, said Brown.

“Through more tweaking than anything, we are matching workforce to workload,” said Brown.

For the second quarter, the company reported adjusted earnings of $1.12 a share on sales of $2.1 billion. The company raised its quarterly dividend to 31 cents a share from 26 cents and expanded its share buyback plan by $2 billion.

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