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Zebra Technologies (ZBRA) Q1 Earnings Surpass Estimates

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Zebra Technologies Corporation (ZBRA - Free Report) reported first-quarter 2023 adjusted earnings of $3.59 per share, beating the Zacks Consensus Estimate of earnings of $3.55 per share. The bottom line decreased 4.5% year over year.

Total revenues of $1,405 million beat the Zacks Consensus Estimate of $1,392 million. The top line decreased 1.9% year over year. Consolidated organic net sales declined 0.3% year over year. Acquisitions contributed 1.5% to the top line, while foreign-currency translation had an adverse impact of 3.1% on sales.

Segmental Performance

Revenues from the Asset Intelligence & Tracking segment were $491 million, up 24.6% year over year. Organic net sales increased 28.4% in the AIT segment. Foreign-currency translation hurt segmental revenues by 3.8%.

The Enterprise Visibility & Mobility segment’s revenues were $914 million, down 12% year over year. Organic net sales declined 11.2%. Acquisitions contributed 2% to segmental revenues, while foreign-currency translations hurt revenues by 2.7%.

Zebra Technologies Corporation Price, Consensus and EPS Surprise

 

Zebra Technologies Corporation Price, Consensus and EPS Surprise

Zebra Technologies Corporation price-consensus-eps-surprise-chart | Zebra Technologies Corporation Quote

Margin Profile

In the first quarter, Zebra Technologies’ cost of sales totaled $738 million, down 7.2% year over year. Total operating expenses were $442 million, up 4% year over year.

ZBRA reported a net income of $150 million in the first quarter, reflecting a decline of 26.8%.

Balance Sheet and Cash Flow

Exiting the first quarter, Zebra Technologies had cash and cash equivalents of $85 million compared with $105 million at the end of December 2022. Long-term debt was $1,880 million compared with $1,809 million at the end of December 2022.

In the first three months of 2023, Zebra Technologies used net cash of $76 million in operating activities against $54 million in cash generated at the end of the year-ago period. In the same time period, the company incurred capital expenditure of $16 million. Free cash outflow was $92 million. The company repurchased shares worth $15 million in the quarter.

2023 Outlook

Zebra Technologies expects second-quarter 2023 adjusted net sales to decrease 9-11%. The company anticipates a 1 percentage-point positive impact from acquired assets and an approximate 2 percentage-point adversity from foreign-currency translation.

ZBRA expects an adjusted EBITDA margin of 20% for the second quarter. The company anticipates an adjusted effective tax rate of 19% for the ongoing quarter. Adjusted earnings are predicted to be $3.20-$3.40.

For 2023, the company expects adjusted net sales to decrease 2-6%. The company expects a 0.5 percentage-point positive impact from acquired assets and an approximate 1 percentage-point adversity from foreign-currency translation.

ZBRA anticipates an adjusted EBITDA margin of 22%, which includes about $40 million of premium supply-chain expenses. Free cash flow is expected to be $450-$550 million, inclusive of the $180 million of previously announced settlement payments.

Zacks Rank & Stocks to Consider

ZBRA currently carries a Zacks Rank #3 (Hold). Some top-ranked companies from the Industrial Products sector are discussed below:

Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank #1 (Strong Buy). IR’s earnings surprise in the last four quarters was 8.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 3.3%. The stock has rallied 11.2% in the past six months.

Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 9.1%, on average.

In the past 60 days, estimates for Parker-Hannifin’s fiscal 2023 (ending June 2023) earnings have risen 0.8%. The stock has gained 14.4% in the past six months.

Allegion plc (ALLE - Free Report) presently carries a Zacks Rank of 2. ALLE’s earnings surprise in the last four quarters was 12.5%, on average.

In the past 60 days, Allegion’s earnings estimates have increased 3.2% for 2023. The stock has gained 8.1% in the past six months.

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