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Zebra (ZBRA) Q4 Earnings & Revenues Top Estimates, Up Y/Y

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Zebra Technologies Corporation ZBRA reported solid fourth-quarter 2021 results, with earnings and sales surpassing estimates by 5.1% and 1.4%, respectively.

The company’s adjusted earnings per share in the reported quarter came in at $4.54, outpacing the Zacks Consensus Estimate of $4.32. The bottom line also increased 1.8% on a year-over-year basis.

In 2021, the company’s earnings came in at $18.45, an increase of 44.1% on a year-over-year basis.

Revenues & Segmental Performance

In the fourth quarter, Zebra generated net sales of $1,467 million, reflecting a year-over-year increase of 12.2%. The improvement was driven by a 10% increase in organic sales, a 0.8% contribution from acquisitions and a 1.4% gain from movements in foreign currencies. The top line surpassed the Zacks Consensus Estimate of $1,447 million.

The company reports revenues under the segments discussed below:

Revenues from the Asset Intelligence & Tracking segment were $444 million, up 4.5% year over year. The increase was driven by a 3.1% growth in organic sales and a 1.4% gain from movements in foreign currencies.

The Enterprise Visibility & Mobility segment’s revenues were $1,023 million, up 15.2% year over year. The results benefited from 13.2% growth in organic sales, 1.2% benefits from acquisitions and a 0.8% gain from movements in foreign currencies.

In 2021, the company’s net sales came in at $5,633 million, up 26.4% year over year.

Zebra Technologies Corporation Price, Consensus and EPS Surprise

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 fourth quarter, Zebra’s cost of sales totaled $798 million, reflecting a rise of 15.7% from the year-ago quarter. Total operating expenses were $446 million, reflecting an increase of 15.2%.

Net income in the reported quarter decreased 4% year over year to $191 million while adjusted margin declined 220 basis points to 13%.

Balance Sheet and Cash Flow

Exiting 2021, the company had cash and cash equivalents of $332 million, up 8.1% from $307 million recorded at the end of the prior quarter. Long-term debt was down 1.9% sequentially to $922 million.

In 2021, it generated net cash of $1,069 million from operating activities compared with $962 million in the previous year. In 2021, its net debt repayments totaled $257 million, and interest payments were $32 million. Capital expenditure was $59 million. Free cash flow was $1,010 million, reflecting an increase of 12.8% from a year ago.

In 2021, the company repurchased shares worth $57 million compared with $200 million in 2020.

Outlook

For the first quarter of 2022, Zebra estimates adjusted net sales to grow 1-3% on a year-over-year basis. Adjusted earnings are projected to lie in the range of $3.70 to $4.00. Adjusted effective tax rate is likely to be about 18%.

For 2022, the company anticipates adjusted net sales to grow 3-7% year over year. It expects free cash flow to be a minimum of $900 million.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies from the Zacks Industrial Products sector are discussed below.

AZZ Inc. AZZ presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Its earnings surprise for the last four quarters was 16.90%, on average.

AZZ’s earnings estimates increased 2.3% for fiscal 2022 (ending February 2022) and 3.7% for fiscal 2023 (ending February 2023) in the past 30 days. Its shares have lost 13.4% in the past three months.

Franklin Electric Co., Inc. FELE presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 16.27%, on average.

In the past 30 days, Franklin Electric’s earnings estimates have been stable for both 2021 (results are awaited) and 2022. FELE’s shares have lost 8.2% in the past three months.

SPX FLOW, Inc. FLOW presently carries a Zacks Rank #2.

SPX FLOW’s earnings estimates have increased 0.3% for 2022 in the past 30 days. FLOW’s shares have gained 7.6% in the past three months.


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