Zebra Technologies stock up 5% as Q3 results, guidance top estimates

LINCOLNSHIRE, Ill. - Zebra Technologies Corporation (NASDAQ:ZBRA) reported better-than-expected third quarter results and issued upbeat guidance, sending its shares soaring 5.89% in early trading.

The digital solutions provider posted adjusted earnings per share of $3.49, beating analyst estimates of $3.23. Revenue rose 31.3% YoY to $1.26 billion, surpassing the consensus forecast of $1.22 billion.

"Our third quarter performance reflects excellent execution by our teams supported by continuing recovery in demand, strong gross margin, and the completion of our restructuring actions, enabling us to deliver sales and earnings results above the high end of our outlook," said Bill Burns, Chief Executive Officer of Zebra Technologies.

For the fourth quarter, Zebra expects sales growth between 28% and 31% compared to the prior year. The company forecasts adjusted earnings per share of $3.80 to $4.00, well above analyst projections of $3.50.

Gross margin expanded to 48.8% in Q3 from 44.7% a year ago, driven by volume leverage and business mix. Adjusted EBITDA margin improved significantly to 21.4% from 11.6% in the prior-year period.

The company completed restructuring actions expected to generate approximately $120 million in net annualized cost savings.

"We have increased our full year outlook for profitable growth to reflect our recent performance and continued momentum in demand," Burns added.

Zebra now anticipates full-year free cash flow of at least $850 million. The strong results and guidance underscore the company's continued leadership in providing innovative digital solutions for supply chain automation.

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Source: Investing.com