Zebra Technologies, a maker of enterprise systems for managing inventory and assets, on Tuesday beat Wall Street's targets for the first quarter. ZBRA stock jumped on the news.
The Lincolnshire, Ill.-based company earned an adjusted $4.02 a share on sales of $1.31 billion in the March quarter. Analysts polled by FactSet had expected Zebra earnings of $3.62 a share on sales of $1.29 billion. On a year-over-year basis, Zebra earnings surged 42% while sales increased 11%.
For the current quarter, Zebra predicted $25 million to $30 million in U.S. import tariff expenses. It now expects to earn an adjusted $3.25 a share on sales of $1.28 billion, based on the midpoint of its outlook. Wall Street had been modeling earnings of $3.52 a share on sales of $1.28 billion in the second quarter. In the same quarter last year, Zebra earned $3.18 a share on sales of $1.22 billion.
"Demand trends have continued to be positive into the second quarter, and we are leaving our full-year outlook unchanged, with the exception of the direct cost of tariffs," Chief Executive Bill Burns said in a news release.
On the stock market today, ZBRA stock climbed 5.2% to close at 256.05. Year to date, through Monday's close, ZBRA stock was down 37% over concerns about the impact of the Trump tariffs.
Zebra makes hardware and software for digitizing and automating frontline workflows in such markets as retail, health care, manufacturing and transportation.
Trump Tariff Impact
Zebra forecast a gross profit impact of about $70 million this year from the Trump tariffs. That assumes the current tariff rates remain along with exemptions for electronics and the United States-Mexico-Canada Agreement.
Meanwhile, Zebra is working to mitigate the tariffs by shifting production to other countries and through price increases.
Over the last decade, Zebra's U.S. imports from China have declined from 85% to about 30%.
Chief Financial Officer Nathan Winters told Investor's Business Daily that Zebra has been focused on supply chain resiliency since President Donald Trump's first term in office. It also has manufacturing operations in Vietnam, Malaysia, Taiwan and Mexico.
In another tariff-related move, Zebra raised prices this week on most of its products in the U.S. by at least 10%, Winters said.
Despite the economic uncertainty posed by the Trump tariffs, Zebra hasn't seen any changes in customer buying behavior or project timelines, Winters said.
"We still remain very confident in the long-term growth prospects of the company," Winters said. "The value proposition and the need to digitize and automate workflows has not changed. The conversations we have with customers remain very positive. So, we'll work through this tariff uncertainty but it doesn't change our long-term conviction in the business."
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