Zebra Technologies' shares are up 15% today after announcing Q2/19 earnings and plans for a $1 billion share repurchase.
Barcode scanning device firm Zebra Technologies Inc. (ZBRA:NASDAQ) shares are trading higher today after announcing second quarter earnings for the period ending June 29, 2019.
In the report, the company advised that net sales increased to $1.097 billion in Q2/19 compared to $1.012 billion in Q2/18. By sector, net sales for the firm's Enterprise Visibility & Mobility (EVM) segment were $727 million in Q2/19 versus $661 million in Q2/18, and for the Asset Intelligence & Tracking (AIT) segment net sales were $370 million in Q2/19 versus $351 million in Q2/18. The firm indicated that Q2/19 gross profit was $520 million compared to $472 million in Q2/18. Net income for Q2/19 was $124 million, or $2.26 per diluted share, compared to net income of $70 million, or $1.29 per diluted share, for Q2/18.
Adjusted EBITDA for Q2/19 increased to $233 million, or 21.2% of adjusted net sales, compared to $199 million, or 19.7% of adjusted net sales, for Q2/18 primarily due to a higher gross margin due to lower operating expenses as a percentage of net sales. Non-GAAP net income for Q2/19 was $165 million, or $3.02 per diluted share, compared with $135 million, or $2.48 per diluted share in Q2/18.
Zebra CEO Anders Gustafsson stated, "Today, we also announced a $1 billion share repurchase authorization which underscores our Board of Directors' confidence in the company's prospects for profitable growth and shareholder value creation." The report, however, did not mention the exact time frame or specifics for the repurchase plan.
In addition, the company provided some forward guidance stating that it expects Q3/19 net sales to increase by 3–5% from Q3/18. The firm estimates that the Adjusted EBITDA margin will be approximately 22% for Q3/19 with Non-GAAP diluted earnings per share expected to be in the range of $3.15–3.35 assuming an adjusted effective tax rate of 16–17%.
For full-year 2019 the company expects net sales to increase approximately by 5–8% from 2018 with an Adjusted EBITDA margin expected of approximately 22% for the full-year 2019, favorable to 2018 and its prior outlook. For full-year 2019 the company expects to generate free cash flow of at least $625 million.
Zebra Technologies designs, manufactures and sells automatic identification and data capture products and solutions used in the healthcare, retail, transportation and logistics, manufacturing, hospitality, data services and government sectors. The firm's products include barcode scanners, mobile computers, RFID (radio frequency identification devices) readers, specialty printers for barcode labeling and personal identification, real-time location systems, related accessories and supplies, such as self-adhesive labels and other consumables, and software utilities and applications.
ZBRA shares opened up nearly 9% higher today at $206.45 (+$17.03, +8.99%) on the news. Since the market open shares have traded even higher, reaching $220.46/share at one point. At present, shares are trading at $217.71 (+$28.29, +14.94%).
Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.