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What's in Store for Zebra Technologies (ZBRA) in Q1 Earnings?

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Zebra Technologies Corporation (ZBRA - Free Report) is set to release first-quarter 2019 results on Apr 30, before the opening bell.

Past-Quarter Performance

The company’s fourth-quarter 2018 adjusted earnings and revenues surged 33% and 11%, respectively, on a year-over-year basis. The figures also beat their respective Zacks Consensus Estimate.

In the last reported quarter, the company delivered a positive earnings surprise of 5.80%. Notably, the company surpassed the Zacks Consensus Estimate in the last four quarters, with an average positive earnings surprise of 12.77%.

Zebra Technologies Corporation Price and EPS Surprise

 

Let's see how things are shaping up prior to this announcement.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) for a likely earnings beat.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

That is not the case here as we will see below.

Earnings ESP:  Zebra Technologies has an Earnings ESP of 0.00%, as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.87.

Zacks Rank: The company carries a Zacks Rank #3, which when combined with ESP of 0.00% makes surprise prediction difficult.

It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors at Play

In the last reported quarter, Zebra Technologies witnessed strong performance in North America, Asia Pacific and Latin America. Driven by strong broad-based demand for its products and solutions, the company enhanced each of its major product and service categories. The momentum will positively impact the first quarter as well.

The company expects first-quarter 2019 net sales to increase in the range of 6% to 9% from the first quarter of 2018. Adjusted EBITDA margin is expected to be approximately 21% for the first quarter of 2019. Adjusted earnings per share is expected in the band of $2.75 to $2.95.

In August 2018, Zebra Technologies acquired Xplore Technologies Corporation which designs, integrates, markets and sells rugged tablets that are primarily utilized by industrial, government, and field service organizations. The buyout was made with an aim to expand the company’s portfolio of mobile computing devices to cater to a wide range of customers. It has been included in Zebra Technologies Enterprise Visibility & Mobility (EVM) segment and contributed approximately 1% to the company’s net sales growth in 2018. The acquisition is expected to contribute to the first-quarter results as well. The company projects approximately 150-200 basis point additive impact from the acquisition.

Further, strong order backlog will aid revenues in the to-be-reported quarter. The first-quarter Zacks Consensus Estimate for total sales of $1.05 billion, indicates an improvement of 7.7% from the prior-year quarter.

Additionally, lower tax rate will aid earnings in the to-be-reported quarter. Also, lower interest expense due to reduced debt levels will bolster first-quarter earnings. However, unfavorable foreign currency translation is likely to negatively impact the to-be-reported quarter. The Zacks Consensus Estimate for Zebra Technologies is pegged at $2.87, suggesting a decline of 12.11% from the year-ago reported figure.

Price Performance


Shares of Zebra Technologies’ have gained 69% in the past year against the industry’s decline of 1.3%.

Stocks to Consider

Here are a few companies that you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

Sun Hydraulics Corporation has an Earnings ESP of +1.05% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Unifirst Corporation (UNF - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #2.

Actuant Corporation has an Earnings ESP of +5.00% and a Zacks Rank #2.

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