Zebra Technologies, a maker of enterprise systems for tracking and managing inventory and assets, on Tuesday beat analyst estimates for the first quarter. But its profit guidance missed views. ZBRA stock fell on the news.
The Lincolnshire, Ill.-based company earned an adjusted $4.01 a share on sales of $1.43 billion in the March quarter. Analysts polled by FactSet expected Zebra earnings of $3.86 a share on sales of $1.37 billion. On a year-over-year basis, Zebra earnings fell 16% while sales increased 6%.
Zebra's profits declined primarily because of supply chain issues, which led to increased premium freight and component part costs.
"Sales and earnings exceeded the high end of our guidance ranges, despite supply chain costs that were higher than our expectations," Chief Executive Anders Gustafsson said in a news release. "Despite global macro headwinds, we are reiterating our full-year 2022 sales outlook given our strong order backlog and robust pipeline."
But the company lowered its adjusted earnings margin prediction because of increased supply chain costs.
ZBRA Stock Sinks On Soft Earnings Outlook
For the current quarter, Zebra forecast adjusted earnings of $4.20 a share on sales of $1.45 billion. That's based on the midpoint of its guidance. Wall Street had predicted Zebra earnings of $4.51 a share on sales of $1.425 billion in the second quarter, FactSet said.
On the stock market today ZBRA stock fell 3% to close at 368.14.
ZBRA stock hit an all-time high of 615 on Dec. 10. But it tumbled during the stock market correction.
Zebra makes rugged mobile computers, bar code scanners and printers, and RFID tracking tags that link to enterprise systems to enable real-time visibility of inventory and other assets. It offers systems for retail, e-commerce, health care, manufacturing, transportation and other industries.
Supply Chain Issues To Linger
Zebra raised prices last week to offset rising transportation and logistics costs, Chief Financial Officer Nathan Winters told Investor's Business Daily.
"We do expect the freight rates and some of those constraints to persist into next year," he said. However, the company predicts a gradual improvement through the remainder of the year both in its ability to source components and in shipping costs, he said.
ZBRA stock ranks sixth out of 32 stocks in IBD's Electronics-Miscellaneous Products industry group, according to IBD Stock Checkup. It has a mediocre IBD Composite Rating of 52 out of 99. The Composite Rating scores a stock's key growth metrics against all other stocks regardless of industry group.
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