(Reuters) -Safety and enterprise security services provider Motorola Solutions forecast second-quarter profit below Wall Street estimates on Thursday, signaling dwindling demand for its safety and security services due to potential price increases triggered by the U.S. imposed tariffs.
Shares of the Chicago, Illinois-based company fell about 5% in extended trading.
“As a result of the dynamic environment, the company expects increased costs on materials and components in 2025, which the company currently expects to substantially mitigate,” Motorola Solutions said.
Motorola has a globally spread supply chain and the growing volatility and uncertainty around global trade sparked by U.S. President Donald Trump’s imposed tariffs might lead to increased prices.
Business and government agencies are cutting tech budgets amid rising inflation and recession fears, hurting demand for companies such as Motorola.
Motorola ended the quarter with a backlog of $14.1 billion, down 2%, or $306 million, from last year.
The company provides critical communications gear including walkie-talkies, video-surveillance cameras and software solutions, helping communities served by its customers during emergencies.
Motorola expects second-quarter adjusted profit per share between $3.32 and $3.37, below analysts’ average estimate of $3.47 per share, according to data compiled by LSEG.
It expects revenue growth of 4% in the second quarter, below analysts’ estimates of 5.3%.
(Reporting by Kritika Lamba in Bengaluru; Editing by Shailesh Kuber and Alan Barona)
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