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Why Zebra Technologies Stock Popped Today

Timothy Green, The Motley Fool

What happened

Shares of Zebra Technologies (NASDAQ: ZBRA) surged on Tuesday after the data capture company reported its second-quarter results. Zebra posted higher-than-expected earnings, and it announced a new share repurchase authorization. The stock was up about 14.4% at 12:20 p.m. EDT.

So what

Zebra reported second-quarter revenue of $1.1 billion, up 8.4% year over year and in line with the average analyst estimate. The enterprise visibility and mobility segment generated $727 million of revenue, up 10% year over year, while the asset intelligence and tracking segment produced $370 million of revenue, up 5.4% year over year.

A rising chart.

Image source: Getty Images.

Non-GAAP (adjusted) earnings per share (EPS) came in at $3.02, up from $2.48 in the prior-year period and $0.13 higher than analysts were expecting. "Our second quarter results were driven by continued broad-based demand for our solutions with particular strength in mobile computing. We delivered profitable sales growth, and EBITDA margin and earnings per share each exceeded our outlook," said Zebra CEO Anders Gustafsson in prepared remarks included in the earnings release.

Now what

For the third quarter, Zebra expects revenue to increase by 3% to 5% from the prior-year period. This guidance includes a 2 percentage point positive impact from acquisitions and a 1 percentage point negative impact from foreign currency translation. Non-GAAP EPS is expected to be $3.15 to $3.35.

For the full year, the company sees revenue growing by 5% to 8%, along with free cash flow of at least $625 million. Acquisitions and currency are expected to have the same impact as in the third quarter. Along with its results, Zebra announced a $1 billion share repurchase authorization.

While revenue failed to beat expectations, an earnings beat and a commitment to share buybacks were enough to propel the stock higher.

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Timothy Green has no position in any of the stocks mentioned. The Motley Fool recommends Zebra Technologies. The Motley Fool has a disclosure policy.