By Lisa Beilfuss
Zebra Technologies Corp. said its first-quarter sales soared, as
the company benefited from a recent acquisition and saw growth in
its legacy business.
Adjusted profit and revenue results beat the company's
expectations.
"Business activity remained high specifically in North America
and Europe," Chief Executive Anders Gustafsson said. During the
quarter the company said it made progress on cost-cutting
initiatives and integrating its recently-acquired scanner business
from Motorola Solutions Inc.
Chicago-based Zebra, named for the black and white stripes of
the bar codes it prints, last year paid $3.5 billion to acquire
Motorola's scanner business. The deal, Zebra's biggest and at a
price higher than its own market value, was a move to stave off
competition by combining bar-code labels and radio tags with
Motorola's computers and scanners.
Motorola's former enterprise business accounted for 63% of
overall revenue during the first quarter.
Zebra has said the newly acquired business increases its foreign
exchange exposure. In the first quarter, Zebra took a $27.2 million
currency-related hit.
In all for the quarter, the company reported a loss of $25.3
million, or 50 cents a share, down from a profit of $41.6 million,
or 82 cents a share, a year earlier.
Excluding certain items, like acquisition and restructuring
costs and the foreign exchange loss, per-share earnings rose to
$1.39 from 96 cents.
Revenue grew to $893.2 million from $288.3 million.
Zebra projected adjusted earnings of 95 cents to $1.20 a share
on revenue of $870 million to $890 million, while analysts expected
per-share profit of $1.12 and $881.8 million in sales.
Sales from the acquired Motorola business were $561.6 million,
while the legacy Zebra business rose 15% to $331.6 million.
Gross margin contracted to 45.8% from 51.3%, reflecting a
changing mix of products and services. Zebra noted that enterprise
products generally have lower gross margins than legacy
offerings.
For the current quarter, the company anticipates adjusted
earnings per share of $1 to $1.25 on revenue of $865 million to
$895 million. Analysts have been looking for $1.17 in per-share
profit and $877 million in sales.
Zebra shares, up about 20% this year, were inactive during
premarket trading.
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