Zebra Technologies, a maker of enterprise systems for managing inventory and assets, on Tuesday beat analyst estimates for the third quarter. But Zebra missed views with its outlook for the fourth quarter. ZBRA stock dipped on the news.
The Lincolnshire, Ill.-based company earned an adjusted 87 cents a share on sales of $956 million in the September quarter. Analysts polled by FactSet had expected Zebra earnings of 81 cents a share on sales of $927 million. On a year-over-year basis, Zebra earnings dropped 79% while sales fell 31%.
For the current quarter, Zebra expects to earn an adjusted $1.60 a share on sales of $992 million. That's based on the midpoint of its guidance. Wall Street had been looking for earnings of $1.69 a share on sales of $1.02 billion. In the year-earlier period, Zebra earned $4.75 a share on sales of $1.5 billion.
"As expected, our third-quarter results were impacted by broad-based end market softness and elongated sales cycles across our product categories, as well as distributor destocking," Chief Executive Bill Burns said in a news release.
He added, "While we believe demand trends are leveling, we are not seeing signs of a market recovery based on customer behavior, and remain cautious in our planning for the remainder of the year and first half of 2024."
ZBRA Stock Slips After Report
On the stock market today, ZBRA stock declined 0.2% to close at 209.43. ZBRA stock is in a three-weeks-tight pattern with a buy point of 216.57, according to IBD MarketSmith charts.
Zebra Technologies 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.
"While the headline results were negative, we delivered on what we said we would," Chief Financial Officer Nathan Winters told Investor's Business Daily. "We're managing what we can control."
Zebra is seeing demand stabilize and expects sales to grow when macroeconomic conditions improve, he said.
"We're not seeing customers cancel projects. They're generally pushing them out. But we know they can't do that forever," Winters said.
Zebra ranks ninth out of 35 stocks in IBD's Electronics-Miscellaneous Products industry group, according to IBD Stock Checkup. ZBRA stock has a poor IBD Composite Rating of 39 out of 99.
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