Bar-Code Company Zebra Reports Smaller-Than-Expected Sales Decline
09 Agosto 2016 - 4:20PM
Dow Jones News
Zebra Technologies Corp. said sales slipped in its latest
quarter as customers continued to rein in spending, though the
bar-code company signaled that the downturn wouldn't accelerate
during the second half of the year.
Shares rose 8.5% in early trading after Zebra backed its view
for the year and said its second-quarter sales decline was less
steep than analysts projected.
The Illinois company, known for the black-and-white bar codes it
prints and reads, acquired Motorola's enterprise business two years
ago for $3.5 billion. The acquisition, Zebra's biggest, was a bid
to fend off competition by combining bar-code labels and radio tags
with Motorola's computers and scanners.
But sales in the Motorola, or enterprise, business have softened
in recent quarters, inching up 0.5% in the most recent period after
falling 5.3% in the first quarter. Meanwhile, legacy sales declined
4.7% in the June quarter after dropping 5.7% in the first three
months of the year.
Zebra isn't alone in feeling the pressure of reduced business
spending. Late last month, the Commerce Department reported the
third straight quarter of reduced business investment. Some
economists called the 3.5% decline in second-quarter
business-equipment investment particularly troubling. "It appears
as though the headwinds from sluggish global growth, a strong
dollar, depressed energy activity, tightening credit and rising
election uncertainty are having a lingering and pervasive effect on
business decisions," Gregory Daco, U.S. economist at Oxford
Economics, said last month in the wake of the disappointing gross
domestic product report.
Zebra's Chief Executive Anders Gustafsson on Tuesday said
second-quarter sales, which dipped 1.2%, matched his expectations.
Mr. Gustafsson backed the full-year outlook issued in May, when
Zebra cut guidance because of continued economic uncertainty and
cautious spending behavior across the globe. "We are reiterating
our full-year outlook with the assumption of no material change to
the macro environment, and we remain fully committed to our
strategic priorities," he said.
For the current quarter ending in September, Zebra guided for
sales that would be flat to down 3%. Analysts have been looking for
a 1.2% decline. Zebra sees $1.30 to $1.50 in adjusted per-share
profit for the quarter, bracketing the $1.43 analysts have
predicted.
Overall for the June period, Zebra reported a loss of $49
million, or 95 cents a share, narrower than its year-earlier loss
of $77 million, or $1.50 a share. Excluding acquisition and
integration costs, amortization of intangible assets and other
items, the company earned $1.34 a share, up from $1.03 in the
year-ago quarter.
Revenue fell to $879 million from $890 million. Analysts polled
by Thomson Reuters expected $1.05 in adjusted earnings per share
and $869.2 million in sales.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
August 09, 2016 10:05 ET (14:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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