Zebra Technologies (ZBRA) Tops Q3 EPS by 14c, Beat on Revenues; Offers Q4 EPS Mid-Point Above Consensus, Q4 Revenue Outlook Below Consensus

Zebra Technologies (NASDAQ: ZBRA) reported Q3 EPS of $1.87, $0.14 better than the analyst estimate of $1.73. Revenue for the quarter came in at $935 million versus the consensus estimate of $914.98 million.

Outlook

The company expects fourth-quarter 2017 adjusted net sales to increase approximately 3% to 6% from adjusted net sales of $944 million in the fourth quarter of 2016. The company expects organic net sales growth of approximately 2% to 5% in the fourth quarter. This expectation excludes an approximately 2 percentage point positive impact from foreign currency translation and an approximately 1 percentage point adverse impact from wireless LAN business sales.

Adjusted EBITDA margin is expected to be approximately 19% to 20% for the fourth quarter 2017, favorable to the prior year period. Non-GAAP earnings per diluted share are expected to be in the range of $2.00 to $2.20, assuming an effective tax rate in the low- to mid-20% range.

Additionally, for the full year 2017, the company continues to expect to reduce total debt balances by at least $300 million.

Third-Quarter Financial Highlights

• Strong net sales of $935 million, above the company’s guidance range
• Net loss of $(12) million and diluted loss per share of $(0.23)
• Non-GAAP net income of $101 million and non-GAAP diluted EPS of $1.87
• Adjusted EBITDA increased 10% year-over-year to $180 million; and adjusted EBITDA margin expanded 110 basis points year-over-year to 19.2%
• Redeemed $750 million of its 7.25% senior notes

GUIDANCE:

Zebra Technologies sees Q4 2017 EPS of $2.00-$2.20, versus the consensus of $2.08. Zebra Technologies sees Q4 2017 revenue of $944 million, versus the consensus of $961.01 million.

For earnings history and earnings-related data on Zebra Technologies (ZBRA) click here.

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