Zebra Technologies (ZBRA) Q4 Earnings & Revenues Decline Y/Y
Zebra Technologies Corporation ZBRA reported fourth-quarter 2023 adjusted earnings of $1.71 per share. The bottom line slumped 64% year over year.
Total revenues of $1 billion surpassed the Zacks Consensus Estimate of $993 million. The top line plunged 32.9% year over year due to softness across end markets and distributor destocking. Consolidated organic net sales declined 33.1% year over year. Foreign currency translation had an adverse impact of 0.2% on sales.
Segmental Performance
Revenues from the Asset Intelligence & Tracking (AIT) segment declined 33.1% year over year to $346 million. The Zacks Consensus Estimate was pegged at $337 million. Organic net sales decreased 33.6% in the AIT segment. Foreign-currency translation hurt segmental revenues by 0.5%.
The Enterprise Visibility & Mobility segment’s revenues were $663 million, down 32.8% year over year. The Zacks Consensus Estimate was pegged at $654 million. Organic net sales declined 32.7%. Foreign-currency translation had a positive impact of 0.1%.
Zebra Technologies Corporation Price and Consensus
Zebra Technologies Corporation price-consensus-chart | Zebra Technologies Corporation Quote
Margin Profile
In fourth-quarter 2023, Zebra Technologies’ cost of sales totaled $561 million, down 31.4% year over year. Total operating expenses decreased 12% year over year to $374 million.
ZBRA reported a net income of $17 million in the fourth quarter compared with $186 million in the year-ago period.
Balance Sheet and Cash Flow
Exiting the fourth quarter, Zebra Technologies had cash and cash equivalents of $137 million compared with $105 million at the end of December 2022. Long-term debt was $2 billion compared with $1.8 billion at the end of December 2022.
In 2023, Zebra Technologies used net cash of $4 million in operating activities against $488 million cash generated at the end of the year-ago period. In the same period, the company incurred a capital expenditure of $87 million. Free cash outflow was $91 million in the reported quarter against free cash inflow of $413 million in the year-ago period. The company repurchased shares worth $52 million in 2023.
Guidance
For the first quarter of 2024, Zebra Technologies, carrying a Zacks Rank #3 (Hold), expects net sales to decline 17-20% year over year. Adjusted EBITDA margin is expected to be approximately 18% for the quarter. Adjusted earnings per share are expected to be $2.30-$2.60 for the said period. The Zacks Consensus Estimate for the same is $2.05. The adjusted effective tax rate is expected to be approximately 16%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For 2024, the company expects net sales to be in the range of a 1% decline and 3% growth compared with 2023. The adjusted EBITDA margin is expected to be approximately 19%. ZBRA expects free cash flow to be at least $550 million for the year.
Performance of Other Industrial Companies
Tetra Tech, Inc. TTEK reported first-quarter fiscal 2024 (ended Dec 31, 2023) adjusted earnings of $1.40 per share, which surpassed the Zacks Consensus Estimate of $1.35. The bottom line surged 4.5% year over year driven by strong momentum in each of its segments.
In the fiscal first quarter, Tetra Tech generated adjusted revenues of $1.2 billion, reflecting a year-over-year increase of 37.3%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.0 billion, up 37.8% year over year. Tetra Tech’s revenues exceeded the consensus estimate of $974 million.
A. O. Smith Corporation’s AOS fourth-quarter 2023 adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 96 cents. The bottom line jumped 13% year over year, driven by the continued strong demand for residential water heaters in North America.
Net sales of $988.1 million narrowly missed the consensus estimate of $989 million. However, the top line increased 5.6% year over year.
Illinois Tool Works Inc. ITW reported fourth-quarter 2023 adjusted earnings of $2.42 per share, which surpassed the Zacks Consensus Estimate of $2.40. Earnings increased 3.4% year over year.
The company’s revenues of $3.98 billion missed the consensus estimate of $4.01 billion. The top line inched up 0.3% year over year due to a favorable foreign currency translation of 1.2%. However, organic sales decreased 0.5% and divestitures reduced revenues by 0.4%.
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