Zebra Technologies, a maker of enterprise systems for managing inventory and assets, on Thursday beat expectations for the fourth quarter and guided higher than views for the current quarter. But Zebra stock fell on the company's cautious outlook for the full year.
The Lincolnshire, Ill.-based company earned an adjusted $4 a share on sales of $1.33 billion in the quarter ended Dec. 31. Analysts polled by FactSet had expected Zebra earnings of $3.94 a share on sales of $1.32 billion. On a year-over-year basis, Zebra earnings increased 134% while sales rose 32%.
For the current quarter, Zebra expects to earn an adjusted $3.60 a share on sales of $1.29 billion, based on the midpoint of its outlook. Wall Street was modeling earnings of $3.57 a share on sales of $1.27 billion in the first quarter. In the same quarter last year, Zebra earned $2.84 a share on sales of $1.18 billion.
For the full year, Zebra forecast adjusted earnings of $15 a share on sales of $5.23 billion. That's based on the midpoint of its guidance. Analysts were looking for earnings of $16.09 a share on sales of $5.38 billion. Zebra is predicting sales growth of 3% to 7% in 2025, vs. growth of 8.7% in 2024.
"As we enter 2025, our backlog supports solid first-quarter growth," Chief Executive Bill Burns said in a news release. "For the remainder of the year, we remain cautious in our growth outlook as our customers navigate an uncertain environment including a dynamic global trade, geopolitical, and macro-economic backdrop."
Zebra Stock Drops After Report
The caution in Zebra's growth outlook for 2025 after the first quarter is related to uncertainty around macroeconomic issues, Chief Financial Officer Nathan Winters told IBD.
"Whether that's trade, geopolitical, interest rates, inflation, there's just a lot moving around that our customers are working through and trying to understand," he said.
Zebra's fourth-quarter sales were boosted by better-than-expected demand from the retail and e-commerce industry segment.
Zebra's health-care industry segment, its smallest, also saw strong growth in Q4, Winters said.
Meanwhile, the transportation and logistics segment is in a "recovery mode" and the manufacturing segment is "lagging," Winters said.
On the stock market today, Zebra stock fell 8.4% to close at 323.42.
Zebra stock notched a more than two-year high of 427.76 on Jan. 22 before retreating. Shares on Wednesday closed below their 200-day line for the first time in a year.
Zebra makes hardware and software for digitizing and automating frontline workflows in such markets as retail, health care, manufacturing and transportation.
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