Zebra Technologies (ZBRA) Q3 Earnings Beat, Revenues Fall Y/Y
Zebra Technologies Corporation ZBRA reported third-quarter 2023 adjusted earnings of 87 cents per share, which beat the Zacks Consensus Estimate of 76 cents. The bottom line slumped year over year.
Total revenues of $956 million surpassed the Zacks Consensus Estimate of $917.5 million. The top line plunged 30.6% year over year due to softness across end markets and elongated sales cycles across product categories.
Consolidated organic net sales declined 29.6% year over year. Foreign-currency translation had an adverse impact of 1% on sales.
Zebra Technologies Corporation Price, Consensus and EPS Surprise
Zebra Technologies Corporation price-consensus-eps-surprise-chart | Zebra Technologies Corporation Quote
Segmental Performance
Revenues from the Asset Intelligence & Tracking (AIT) segment declined 26.7% year over year to $324 million. The Zacks Consensus Estimate was pegged at $419 million. Organic net sales decreased 25.8% in the AIT segment. Foreign-currency translation hurt segmental revenues by 0.9%.
The Enterprise Visibility & Mobility segment’s revenues were $632 million, down 32.5% year over year. The Zacks Consensus Estimate was pegged at $510 million. Organic net sales declined 31.4%. Foreign-currency translations hurt revenues by 1.1%.
Margin Profile
In third-quarter 2023, Zebra Technologies’ cost of sales totaled $529 million, down 29.5% year over year. Total operating expenses increased 3.1% year over year to $439 million.
ZBRA incurred a net loss of $15 million in the third quarter against a net income of $170 million in the year-ago period.
Balance Sheet and Cash Flow
Exiting the third quarter, Zebra Technologies had cash and cash equivalents of $61 million compared with $105 million at the end of December 2022. Long-term debt was $2,121 million compared with $1,809 million at the end of December 2022.
In the first nine months of 2023, Zebra Technologies used net cash of $145 million in operating activities against $221 million in cash generated at the end of the year-ago period. In the same period, the company incurred capital expenditure of $48 million. Free cash was negative $193 million in the reported quarter compared with positive $170 million in the year-ago period. The company repurchased shares worth $52 million in the first nine months of 2023.
Guidance
For the fourth quarter of 2023, Zebra Technologies, carrying a Zacks Rank #3 (Hold), expects net sales to decline 32-36% year over year. Adjusted EBITDA margin is expected to be approximately 16% for the quarter. Adjusted earnings per share are expected to be $1.40-$1.80 for the said period. The mid-point of the guided range — $1.60 — lies above the Zacks Consensus Estimate of $1.50. Adjusted effective tax rate is expected to be approximately 17%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
While free cash flow is expected to be positive in the second half of 2023, it is expected to be negative for the full year.
Performance of Other Industrial Companies
Cimpress plc CMPR reported first-quarter fiscal 2024 (ended Sep 30, 2023) adjusted earnings of 17 cents per share, which surpassed the Zacks Consensus Estimate of a loss of 34 cents per share. The company incurred a loss of 97 cents per share in the year-ago quarter.
Cimpress’ total revenues of $757.3 million missed the Zack Consensus Estimate of $771 million. The top line increased 7.7% year over year, driven by growth across most of its businesses.
Stanley Black & Decker SWK reported third-quarter 2023 adjusted earnings (excluding $1.02 from non-recurring items) of $1.05 per share, which beat the Zacks Consensus Estimate of 84 cents. The bottom line jumped 38.2% year over year due to lower costs.
Stanley Black’s net sales of $3,953.9 million missed the Zacks Consensus Estimate of $4,019.3 million. The top line also declined 4% year over year due to weakness in the Tools & Outdoor segment.
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