Motorola Solutions (MSI) saw its shares plummet 5.27% in after-hours trading on Thursday, despite reporting better-than-expected first-quarter results. The sharp decline appears to be driven by the company's disappointing second-quarter guidance and concerns over increased costs due to tariffs.

For the first quarter of 2025, Motorola Solutions reported adjusted earnings per share of $3.18, surpassing the analyst estimate of $3.01. Revenue came in at $2,528 million, also beating the expected $2,516 million. The company's EBIT margin stood at a healthy 23% for the quarter.

However, the company's guidance for the second quarter fell short of market expectations. Motorola Solutions forecasts Q2 adjusted EPS between $3.32 and $3.37, with revenue growth of 4%. This outlook appears to be below the FactSet analyst consensus of $3.47 per share. Additionally, the company maintained its full-year 2025 revenue growth guidance of about 5.5% and provided a full-year adjusted EPS range of $14.64 to $14.74.

Adding to investor concerns, Motorola Solutions noted that it expects increased costs on materials and components in 2025 due to tariffs. Although the company stated it currently expects to substantially mitigate these costs, the announcement may have contributed to the negative sentiment. The after-hours plunge suggests that market participants are recalibrating their expectations for Motorola Solutions' near-term performance in light of these factors.