Zebra Technologies Stock Gains After Q1 Print, What's Going On?

Zebra Technologies Corp (NASDAQ:ZBRA) reported a fiscal first-quarter 2024 net sales growth of 16.4% year-on-year to $1.18 billion, beating the consensus of $1.15 billion. 

The adjusted EPS of $2.84 beat the consensus of $2.45. The stock price moved higher after the results.

Consolidated organic net sales for the quarter decreased by 16.8% Y/Y. 

Net sales in the Enterprise Visibility & Mobility (EVM) segment fell 11.3% Y/Y to $783 million. The net sales of the Asset Intelligence and Tracking (AIT) segment decreased by 24.9% Y/Y to $392 million.

The adjusted gross margin improved by 60 bps to 48.1%. This was primarily due to lower premium supply chain costs and improved software and service margins. 

The adjusted EBITDA margin declined by 150 bps to 19.9%, primarily due to higher operating expenses.

Zebra held $127 million in cash and equivalents as of March 30, 2024.

Zebra reiterated the 2022 Productivity Plan and Voluntary Retirement Plan will entail charges of $130 million, with net annualized expense savings of $120 million.

“While our first quarter results continued to be impacted by broad-based softness across our end markets, we realized improvement in demand from the fourth quarter of 2023,” said Bill Burns, Chief Executive Officer of Zebra Technologies.

Burns credits the “improvement in profitability” to cost restructuring and an improved gross margin.

Outlook: Zebra expects second-quarter net sales to decrease between 1% and 5% Y/Y or net sales of $1.153 billion – $1.202 billion compared to the consensus of $1.14 billion. It projects an adjusted EPS of $2.60 – $2.90 versus the street consensus of $2.56.

Zebra expects FY24 net sales growth of  between 1% and 5% (prior (1)% – 3%) Y/Y or net sales of $4.630 billion – $4.813 billion (prior $4.538 billion – $4.722 billion) compared to the consensus of $4.680 billion. It projected adjusted EPS of $11.25 – $12.25 versus consensus of $11.12.

Zebra Technologies stock gained over 4% in the last 12 months. Investors can gain exposure to the stock via ProShares Big Data Refiners ETF (NYSE:DAT) and ProShares S&P Kensho Smart Factories ETF (NYSE:MAKX).

Price Action: ZBRA shares traded higher by 5.00% at $315.00 premarket on the last check Tuesday.

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