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What's in Store for Zebra Technologies (ZBRA) in Q3 Earnings?

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Zebra Technologies Corporation (ZBRA - Free Report) is scheduled to release third-quarter 2022 results on Nov 1, before market open.

The Zacks Consensus Estimate for the company’s third-quarter earnings has been revised downward by 9.7% in the past 90 days. However, the company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 8.5%.

Let’s see how things have shaped up for Zebra Technologies this earnings season.

Factors to Note

Strong backlog and robust demand for solutions are expected to have driven Zebra Technologies’ third-quarter performance. The Asset Intelligence & Tracking segment is expected to have benefited from a strong recovery in printing. Solid growth in data capture and mobile computing solutions is likely to have supported the Enterprise Visibility & Mobility segment’s performance in the to-be-reported quarter.

Asia Pacific sales are expected to reflect higher sales from India. Strong growth in Mexico sales is expected to have boosted Latin America sales. For the third quarter of 2022, Zebra Technologies anticipates adjusted net sales to increase 2-4% year over year. The Zacks Consensus Estimate for the same indicates a year-over-year change of 2.8%.

Contributions from the acquisitions of Matrox Imaging (June 2022), antuit.ai (October 2021) and Adaptive Vision (May 2021) are expected to have boosted ZBRA’s top line in the soon-to-be-reported quarter. For the third quarter, ZBRA expects acquired businesses to have an approximate 2-point positive impact on net sales.

However, extended lead times and component shortages due to supply-chain disruptions are likely to have impacted North America sales. High freight costs might have dented Zebra Technologies’ bottom-line performance. A strengthening US dollar might have depressed the company’s overseas business performance. For the third quarter, ZBRA expects a 3-point negative impact from foreign-currency translation.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Zebra Technologies this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Zebra Technologies has an Earnings ESP of -0.59% as the Most Accurate Estimate is pegged at $4.52, lower than the Zacks Consensus Estimate of $4.55. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Zebra Technologies currently carries a Zacks Rank #5 (Strong Sell).

Highlights of Q2 Earnings

Zebra Technologies reported second-quarter 2022 adjusted earnings of $4.22 per share, outperforming the Zacks Consensus Estimate of $3.93. The bottom line increased year over year. Total revenues of $1,468 million surpassed the Zacks Consensus Estimate of $1,446.7 million. The top line increased 6.6% year over year. Consolidated organic net sales increased 6.9% year over year. Acquisitions contributed 1.7% to the top line, while foreign-currency translation had an adverse impact of 2% on sales.

Stocks to Consider

Here are some other companies within the broader Industrial Products sector that you may want to consider, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.

Sonoco Products (SON - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank #3. The company is scheduled to release third-quarter 2022 results on Oct 31.

Sonoco’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 4.1%.

Emerson Electric Co. (EMR - Free Report) has an Earnings ESP of +0.81% and a Zacks Rank #3. The company is scheduled to release fourth-quarter fiscal 2022 (ended Sep 30, 2022) results on Nov 2.

Emerson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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