Zebra Technologies Corporation ZBRA reported third-quarter 2024 adjusted earnings of $3.49 per share, which surpassed the Zacks Consensus Estimate of $3.24. The bottom line increased significantly from 87 cents reported in the year-ago quarter. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Total revenues of $1.26 billion surpassed the consensus estimate of $1.21 billion. The top line increased 31.3% year over year, driven by strength in the Enterprise Visibility & Mobility and Asset Intelligence & Tracking units. Consolidated organic net sales increased 30.6% year over year. Foreign-currency translation had a positive impact of 0.7% on total revenues.

ZBRA’s Segmental Performance

Revenues from the Asset Intelligence & Tracking segment rose 26.5% year over year to $410 million. The Zacks Consensus Estimate for segmental revenues was pegged at $391 million. Organic net sales increased 25.8%. Foreign-currency translation had a positive impact of 0.7% on segmental revenues.

The Enterprise Visibility & Mobility segment’s revenues totaled $845 million, up 33.7% year over year. The consensus estimate for segmental revenues was pegged at $819 million. Organic net sales increased 33%. Foreign-currency translation had a positive impact of 0.7%.

ZBRA’s Margin Profile

In the third quarter, Zebra Technologies’ cost of sales totaled $642 million, up 21.4% year over year. Total operating expenses decreased 3.9% year over year to $422 million.

The company reported a net income of $137 million against a loss of $15 million in the year-ago period.

Balance Sheet and Cash Flow

Zebra Technologies had cash and cash equivalents of $676 million at the end of the third quarter compared with $137 million at the end of December 2023. Long-term debt totaled $2.08 billion compared with $2.05 billion at the end of December 2023.

In the first nine months of 2024, Zebra Technologies generated net cash of $707 million in operating activities against $145 million cash used in the year-ago period. The company incurred a capital expenditure of $41 million in the same time frame. Free cash inflow amounted to $665.9 million against free cash outflow of $193 million in the year-ago period.

ZBRA’s Guidance

For the fourth quarter, Zebra Technologies expects net sales to increase in the band of 28-31% year over year. Foreign-currency translation is anticipated to have a favorable impact of 1%. 

Adjusted EBITDA margin is anticipated to be 22% in the fourth quarter. Adjusted earnings per share are expected to be in the band of $3.80-$4.00. The effective tax rate is expected to be 17%.

For 2024, it expects free cash flow to be at least $850 million.

Zacks Rank & Stocks to Consider

ZBRA currently carries a Zacks Rank #3 (Hold). Some better-ranked companies are discussed below:

Graham Corporation GHM currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GHM delivered a trailing four-quarter average earnings surprise of 133.2%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has remained stable.

Ingersoll-Rand plc IR presently carries a Zacks Rank of 2. IR delivered a trailing four-quarter average earnings surprise of 11%.

In the past 60 days, the consensus estimate for Ingersoll-Rand’s 2024 earnings has inched up 0.6%.

Parker-Hannifin Corporation PH currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.

In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 0.3%.

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