Motorola Solutions to Buy Back Up to $2 Billion in Stock

(Updates with closing share price in fifth paragraph.)

July 28 (Bloomberg) -- Motorola Solutions Inc., the maker of bar-code scanners and walkie-talkies, will buy back as much as $2 billion of its shares and begin paying a dividend after selling its networks unit and cutting debt.

Motorola Solutions will repurchase the stock on the open market or in private transactions through the end of next year, depending on market conditions. The Schaumburg, Illinois-based company will start paying a quarterly payout of 22 cents a share in October, according to a statement today.

Chief Executive Officer Greg Brown said in an interview this month that returning capital to shareholders was a “priority” after the company sold its networks business to Nokia Siemens Networks for $975 million and reduced its debt by $540 million this year.

With no obvious gaps in either its enterprise or government divisions, Motorola Solutions remains focused on returning cash to shareholders, Brown said in an interview today. If the company considers acquisitions, it “is more dependent on the characteristics of the opportunity itself” rather than filling any immediate need, he said.

Motorola Solutions rose $2.05, or 4.6 percent, to $46.37 at 4 p.m. in New York Stock Exchange composite trading. The stock has climbed 25 percent this year. Motorola Inc. became Motorola Solutions Inc. in January after spinning off its handset and set-top box businesses into a separate company.

‘Flexibility and Firepower’

Sales advanced 6.1 percent to $2.06 billion last quarter from a year earlier, the company said. Sales may rise 7 percent to 8 percent in the third quarter and as much as 6 percent for the full year. Motorola Solutions ended the quarter with total cash of $6.7 billion.

Cash reserves after the dividend and buyback are accounted for “still allow us very good strategic flexibility and firepower,” Brown said.

Sales of walkie-talkies and other emergency equipment to governments climbed 4 percent last quarter to $1.3 billion. Sales of barcode scanners and other gear to companies rose 11 percent to $747 million in the quarter.

--Editors: Cecile Daurat, James Callan

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net