Zebra Technologies Corp (ZBRA, Financial) disclosed its first-quarter financial results for 2024 on April 30, revealing a year-over-year decline in both revenue and earnings, falling short of analyst estimates. The detailed financial outcomes can be accessed through Zebra Technologies Corp's 8-K filing.
Zebra Technologies, a leader in automatic identification and data capture technology, reported a significant 16.4% decrease in net sales, totaling $1,175 million, compared to $1,405 million in the previous year. This decline was reflected across its key business segments, with the Enterprise Visibility & Mobility (EVM) segment and the Asset Intelligence & Tracking (AIT) segment experiencing decreases of 11.8% and 25.3%, respectively. The company's net income also fell to $115 million, or $2.23 per diluted share, from $150 million, or $2.90 per diluted share in the prior year, missing the estimated earnings per share of $2.45.
Financial Highlights and Strategic Adjustments
The company's adjusted EBITDA decreased to $234 million from $301 million, marking a 22.3% decline. Despite these challenges, Zebra Technologies managed to improve its gross margin slightly from 47.5% to 47.9% due to reduced premium supply chain costs and better margins in software and services. The adjusted gross margin also saw a modest increase to 48.1%.
Operating expenses were reduced to $404 million from $442 million, largely due to the company's restructuring actions which are part of its broader cost-saving initiatives. These initiatives, including the 2024 Productivity Plan and the Voluntary Retirement Plan, are projected to generate approximately $120 million in annualized net savings, with $25 million realized in Q1 2024.
Operational and Market Challenges
CEO Bill Burns highlighted the continued impact of market softness on the company's performance but noted sequential improvements in profitability stemming from strategic cost reductions and operational efficiencies. "Our increased 2024 outlook reflects a better-than-expected start to the year with modest recovery in demand and progress on our cost actions," Burns stated, emphasizing the company's resilience and ongoing adjustments to navigate current market conditions.
Future Outlook and Investor Relations
Looking ahead to Q2 2024, Zebra Technologies expects a slight decrease in net sales, projecting a range between a 1% and 5% drop year-over-year. However, the adjusted EBITDA margin is anticipated to be slightly above 19%, with non-GAAP diluted earnings per share estimated between $2.60 and $2.90. For the full year, the company forecasts net sales growth between 1% and 5%, with an adjusted EBITDA margin of approximately 20% and non-GAAP diluted earnings per share ranging from $11.25 to $12.25.
The company remains committed to its strategic initiatives aimed at enhancing operational efficiency and maintaining its competitive edge in the industry. Investors and stakeholders are encouraged to participate in the upcoming webcast to discuss these results and forward strategies in more detail.
Zebra Technologies continues to navigate a challenging market environment with strategic focus and operational adjustments, aiming to deliver improved performance and shareholder value in the upcoming quarters.
Explore the complete 8-K earnings release (here) from Zebra Technologies Corp for further details.
