Zebra Technologies Surpasses Earnings Expectations in Q4 2024
Zebra Technologies Corporation (ZBRA) posted adjusted earnings of $4.00 per share for the fourth quarter of 2024, beating the Zacks Consensus Estimate of $3.95. This marks a significant rise from the $1.71 per share reported in the same quarter last year.
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Total revenues reached $1.33 billion, exceeding the consensus estimate of $1.31 billion. This represents a 32.2% increase compared to the previous year, driven by strong performances in the Enterprise Visibility & Mobility and Asset Intelligence & Tracking segments. Additionally, organic net sales grew by 31.6%, while foreign currency translation contributed positively by 0.6% to overall revenues.
Financial Performance Overview
In 2024, Zebra reported net revenues of $4.98 billion, up 8.7% from last year. Adjusted earnings increased by 37.7% to $13.52 per share.
Segment Performance Highlights
The Asset Intelligence & Tracking segment saw revenues rise by 29.5% year over year to $448 million, exceeding the Zacks Consensus Estimate of $441 million, with organic net sales up 28.8%. Currency translation positively impacted total revenues by 0.7%.
Revenues for the Enterprise Visibility & Mobility segment also performed well at $886 million, a 33.6% increase from last year. This figure surpassed the consensus estimate of $871 million, and organic net sales rose by 33.1%, while foreign currency translation improved revenues by 0.5%.
Stock Performance Insights
Zebra Technologies Corporation price-consensus-eps-surprise-chart | Zebra Technologies Corporation Quote
Cost Analysis and Profitability
In the fourth quarter, Zebra Technologies faced a cost of sales totaling $686 million, an increase of 22.3% year over year. Operating expenses rose 13.1% to $423 million, leading to a net income of $163 million, a significant increase from $17 million in the same period last year.
Financial Position and Cash Flow
At the close of the fourth quarter, Zebra Technologies’ cash and cash equivalents totaled $901 million, a jump from $137 million at the end of December 2023. The company’s long-term debt stood at $2.09 billion, slightly up from $2.05 billion previously.
For 2024, Zebra generated significant cash flow, with $1.01 billion from operating activities, a major rise from the previous year’s $4 million outflow. Their capital expenditures were $59 million, resulting in a free cash inflow of $954 million, compared to a $91 million outflow last year.
Future Projections
Looking ahead, Zebra Technologies anticipates a net sales increase of 8-11% year over year for the first quarter of 2025, although they expect a 1% negative effect from foreign currency translation. The adjusted EBITDA margin is projected at approximately 21%, with earnings per share expected between $3.50 and $3.70. For 2025, the company estimates net sales growth of 3-7% and adjusted earnings of $14.75-$15.25 per share, while maintaining a free cash flow target of at least $750 million.
Current Market Position
Zebra Technologies currently carries a Zacks Rank #4 (Sell).
Explore the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance Highlights of Industry Peers
Tetra Tech, Inc. (TTEK) reported earnings of $0.35 per share for the first quarter of fiscal 2025 (ended December 2024), exceeding the Zacks Consensus Estimate of $0.34 and up from $0.28 per share a year earlier.
Tetra’s revenues for the quarter reached $1.2 billion, surpassing estimates by 8.85%, compared to $1.02 billion in the previous year. The company has topped revenue estimates in each of the last four quarters.
Waste Management, Inc. (WM) reported fourth-quarter earnings of $1.70 per share, missing the Zacks Consensus Estimate of $1.79, but slightly better than $1.74 per share a year prior.
WM generated revenues of $5.89 billion for the quarter, narrowly beating the consensus estimate by 0.18%, up from $5.22 billion of the previous year. The company has met revenue estimates two times in the last four quarters.
Packaging Corporation of America (PKG) reported adjusted earnings of $2.47 in the fourth quarter, falling short of the Zacks Consensus Estimate of $2.51, but matching the company’s guidance and rising by 16% year over year.
Sales for the fourth quarter climbed 10.7% year over year to $2.15 billion, driven by increased volumes and favorable pricing/mix, exceeding the consensus estimate of $2.13 billion.
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