LINCOLNSHIRE, Ill. - Zebra Technologies Corporation (NASDAQ: ZBRA), a global leader in enterprise asset intelligence, reported second-quarter earnings that surpassed analyst expectations, with a notable increase in its full-year guidance.
The company's shares jumped 2.9% as it delivered a positive surprise on both the top and bottom lines, indicating investor confidence in its future performance.
For the second quarter ended June 29, 2024, Zebra announced adjusted earnings per share (EPS) of $3.18, outperforming the analyst estimate of $2.80. Revenue also exceeded expectations, coming in at $1.22 billion against the consensus estimate of $1.18 billion. This marks a slight year-over-year (YoY) increase of 0.2% from $1.214 billion reported in the same quarter last year.
The company's CEO, Bill Burns, attributed the strong quarterly performance to disciplined cost management and improved gross margins, driven by reduced supply chain costs and favorable foreign currency impacts. He also highlighted the return to growth in enterprise mobile computing across all vertical end markets.
Looking ahead, Zebra has raised its full-year 2024 guidance, now expecting adjusted EPS to be between $12.30 and $12.90, which is above the consensus estimate of $12.07. Full-year net sales are projected to grow between 4% and 7%, with a 50 basis point favorable impact from foreign currency translation. The adjusted EBITDA margin is anticipated to be between 20% and 21%.
Despite the positive outlook, the company noted a cautious customer spending behavior, particularly for large orders, which have not yet returned to historical levels. Nonetheless, management remains confident in Zebra's position to advance its industry leadership with innovative solutions that digitize and automate customer workflows across the supply chain.
The company's ongoing expense savings from its Exit and Restructuring plans, which are on track to deliver $120 million in annualized net savings, also contributed to the favorable investor sentiment.
Zebra's balance sheet remains robust, with cash and cash equivalents of $411 million and a strong free cash flow expectation of at least $700 million for the full year.
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