Zebra Technologies Corporation (ZBRA - Free Report) reported solid first-quarter 2022 results, with earnings and sales surpassing estimates by 4.7% and 4.2%, respectively.
ZBRA’s adjusted earnings per share in the reported quarter came in at $4.01, outpacing the Zacks Consensus Estimate of $3.83. The bottom line decreased 16.3% on a year-over-year basis.
Revenue & Segmental Performance
In the first quarter, Zebra generated net sales of $1,432 million, reflecting a year-over-year increase of 6.3%. The improvement was driven by a 5.4% increase in organic sales, 0.1% gain from movements in foreign currencies and acquisitions had an adverse impact of 1%. The top line surpassed the Zacks Consensus Estimate of $1,374 million.
ZBRA reports revenues under the segments discussed below:
Revenues from the Asset Intelligence & Tracking segment were $394 million, down 8.2% year over year. The decrease was driven by an 8.1% fall in organic sales and a 0.1% gain from movements in foreign currencies.
The Enterprise Visibility & Mobility segment’s revenues were $1,038 million, up 12.7% year over year. The results benefited from 11.6% growth in organic sales and a 0.1% gain from movements in foreign currencies. However, acquisitions had an adverse impact of 1.2%.
Margin Profile
In the first quarter, Zebra’s cost of sales totaled $795 million, reflecting a rise of 14.9% from the year-ago quarter’s level. Total operating expenses were $425 million, up 11%.
Net income in the reported quarter decreased 10.1% year over year to $205 million while adjusted margin declined 260 basis points to 14.3%.
Balance Sheet and Cash Flow
Exiting the first quarter, Zebra had cash and cash equivalents of $141 million, down 57.5% from $332 million recorded at the end of the prior quarter. Long-term debt was down 1% sequentially to $913 million.
In the first three months of 2022, ZBRA generated net cash of $54 million from operating activities compared with $224 million in the previous year. In the first three months of 2022, its net debt borrowings totaled $105 million, and interest payments were $8 million. Capital expenditure was $14 million. Free cash flow was $40 million compared with $214 reported in the year-ago quarter.
In the first three months of 2022, Zebra repurchased shares worth $305 million.
Outlook
For the second quarter of 2022, Zebra estimates adjusted net sales to grow 3-7% on a year-over-year basis. Adjusted earnings are projected in the range of $4.05-$4.35. Adjusted effective tax rate is likely to be about 18%.
For 2022, Zebra anticipates adjusted net sales to grow 3-7% year over year. It expects free cash flow to be minimum $800 million.
Zacks Rank & Other Stocks to Consider
With a market capitalization of $20 billion, ZBRA currently carries a Zacks Rank #2 (Buy).
Some other top-ranked companies from the industrial products sector are discussed below.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1. AIT delivered a trailing four-quarter earnings surprise of 25.4%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AIT’s earnings estimates have increased 5.4% for fiscal 2022 (ending June 2022) in the past 60 days. Its shares have increased 3.7% in the past three months.
Roper Technologies, Inc. (ROP - Free Report) presently has a Zacks Rank of 2. Its earnings surprise in the last four quarters was 2%, on average.
In the past 60 days, ROP’s earnings estimates have increased 1.1% for 2022. The stock has decreased 0.4% in the past three months.
Ferguson plc (FERG - Free Report) is presently Zacks #2 Ranked. FERG’s earnings surprise in the last four quarters was 14.2%, on average.
In the past 60 days, the stock’s earnings estimates have increased 6.5% for fiscal 2022 (ending July 2022). The same has declined 21% in the past three months.
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Zebra Technologies Corporation (ZBRA - Free Report) reported solid first-quarter 2022 results, with earnings and sales surpassing estimates by 4.7% and 4.2%, respectively.
ZBRA’s adjusted earnings per share in the reported quarter came in at $4.01, outpacing the Zacks Consensus Estimate of $3.83. The bottom line decreased 16.3% on a year-over-year basis.
Revenue & Segmental Performance
In the first quarter, Zebra generated net sales of $1,432 million, reflecting a year-over-year increase of 6.3%. The improvement was driven by a 5.4% increase in organic sales, 0.1% gain from movements in foreign currencies and acquisitions had an adverse impact of 1%. The top line surpassed the Zacks Consensus Estimate of $1,374 million.
ZBRA reports revenues under the segments discussed below:
Revenues from the Asset Intelligence & Tracking segment were $394 million, down 8.2% year over year. The decrease was driven by an 8.1% fall in organic sales and a 0.1% gain from movements in foreign currencies.
The Enterprise Visibility & Mobility segment’s revenues were $1,038 million, up 12.7% year over year. The results benefited from 11.6% growth in organic sales and a 0.1% gain from movements in foreign currencies. However, acquisitions had an adverse impact of 1.2%.
Margin Profile
In the first quarter, Zebra’s cost of sales totaled $795 million, reflecting a rise of 14.9% from the year-ago quarter’s level. Total operating expenses were $425 million, up 11%.
Net income in the reported quarter decreased 10.1% year over year to $205 million while adjusted margin declined 260 basis points to 14.3%.
Balance Sheet and Cash Flow
Exiting the first quarter, Zebra had cash and cash equivalents of $141 million, down 57.5% from $332 million recorded at the end of the prior quarter. Long-term debt was down 1% sequentially to $913 million.
In the first three months of 2022, ZBRA generated net cash of $54 million from operating activities compared with $224 million in the previous year. In the first three months of 2022, its net debt borrowings totaled $105 million, and interest payments were $8 million. Capital expenditure was $14 million. Free cash flow was $40 million compared with $214 reported in the year-ago quarter.
In the first three months of 2022, Zebra repurchased shares worth $305 million.
Outlook
For the second quarter of 2022, Zebra estimates adjusted net sales to grow 3-7% on a year-over-year basis. Adjusted earnings are projected in the range of $4.05-$4.35. Adjusted effective tax rate is likely to be about 18%.
For 2022, Zebra anticipates adjusted net sales to grow 3-7% year over year. It expects free cash flow to be minimum $800 million.
Zacks Rank & Other Stocks to Consider
With a market capitalization of $20 billion, ZBRA currently carries a Zacks Rank #2 (Buy).
Some other top-ranked companies from the industrial products sector are discussed below.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1. AIT delivered a trailing four-quarter earnings surprise of 25.4%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AIT’s earnings estimates have increased 5.4% for fiscal 2022 (ending June 2022) in the past 60 days. Its shares have increased 3.7% in the past three months.
Roper Technologies, Inc. (ROP - Free Report) presently has a Zacks Rank of 2. Its earnings surprise in the last four quarters was 2%, on average.
In the past 60 days, ROP’s earnings estimates have increased 1.1% for 2022. The stock has decreased 0.4% in the past three months.
Ferguson plc (FERG - Free Report) is presently Zacks #2 Ranked. FERG’s earnings surprise in the last four quarters was 14.2%, on average.
In the past 60 days, the stock’s earnings estimates have increased 6.5% for fiscal 2022 (ending July 2022). The same has declined 21% in the past three months.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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