Group 1: Market Overview - U.S. stocks are near record highs, with the S&P 500 achieving its 30th record close in 2024, driven by a tech rally and consumer discretionary stocks [4] - Analysts believe the S&P 500 has further growth potential, with a focus on top-ranked stocks such as Royal Caribbean Cruises, Alphabet, Goldman Sachs, Hasbro, and Zebra Technologies [5] - Wall Street analysts have raised year-end targets for the S&P 500, with Evercore ISI increasing its target to 6,000 and Goldman Sachs to 5,600 [16] Group 2: Earnings Growth - Corporate earnings rebounded with a 6% growth in Q1, the highest in nearly two years, primarily driven by tech earnings, but growth is also seen in Utilities and Energy sectors [8] - Royal Caribbean has an earnings growth estimate of 63.81% for the current year, with a forward P/E of 13.39X [11] - Alphabet's earnings growth estimate is 31.11% for the current year, with a forward P/E of 23.25X [12] - Goldman Sachs has an earnings growth estimate of 59.91% for the current year, with a forward P/E of 12.21X [13] - Hasbro's earnings growth estimate is 45.67% for the current year, with a forward P/E of 16.82X [14] - Zebra Technologies has an earnings growth estimate of 23.28% for the current year, with a forward P/E of 24.89X [15] Group 3: Economic Indicators - Traders see a nearly 56.7% chance of a rate cut in September, with a high probability of a 50 bps cut by December [7] - Federal Reserve officials have indicated potential rate cuts later in the year, citing improving economic data [19] Group 4: Historical Context - Historical data shows that high valuations do not necessarily lead to imminent downturns, as seen during the Covid-19 reopening trade and the dot-com boom [3][18] - Presidential election years have historically performed well for the S&P 500, with an average return of 7.4% [17]

Zebra Technologies Corporation (ZBRA) recently announced the pricing of its private offering of senior notes worth $500 million in aggregate principal amount. The offering is anticipated to close on May 28, 2024, conditional on certain customary closing conditions. The company's shares gained 1.6% yesterday, thereby ending the trading session at $326.98. Inside the Headlines The senior notes carry an interest rate of 6.500% and are scheduled to mature on Jun 1, 2032. Notably, the senior notes are Zebra Tech ...

Zebra Technologies (ZBRA) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The upward trend in estimate revisions for this producer of printers for bar codes, plastic cards and, radio-frequency identification tags reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock pr ...

I would now like to turn the conference over to Mike Steele, Vice President, Investor Relations. Please go ahead. Mike Steele Good morning and welcome to Zebra's first quarter earnings conference call. This presentation is being simulcast on our website at investors.zebra.com and will be archived there for at least 1 year. Our forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially and we refer you to the ...

Zebra Technologies Corporation (ZBRA) reported first-quarter 2024 adjusted earnings of $2.84 per share. The bottom line slumped 27.9% year over year.Total revenues of $1.2 billion surpassed the Zacks Consensus Estimate of $1.1 billion. The top line plunged 16.4% year over year due to softness across end markets. Consolidated organic net sales declined 16.8% year over year. Foreign currency translation had an adverse impact of 0.4% on sales.Segmental PerformanceRevenues from the Asset Intelligence & Tracking ...

Zebra Technologies (ZBRA) came out with quarterly earnings of $2.84 per share, beating the Zacks Consensus Estimate of $2.46 per share. This compares to earnings of $3.94 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 15.45%. A quarter ago, it was expected that this producer of printers for bar codes, plastic cards and, radio-frequency identification tags would post earnings of $1.63 per share when it actually produced earnin ...

[First-Quarter 2024 Results Overview](index=1&type=section&id=First-Quarter%202024%20Results%20Overview) Zebra Technologies reported a Q1 2024 net sales decrease, but improved gross margin and profitability, leading to an increased 2024 outlook [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Bill Burns noted Q1 2024 market softness but sequential demand improvement, with profitability gains from cost restructuring and an increased 2024 outlook - First-quarter results were impacted by broad-based softness across end markets but realized improvement in demand from Q4 2023[3](index=3&type=chunk) - Significant sequential improvement in profitability resulted from cost restructuring actions and improved gross margin[3](index=3&type=chunk) - The increased 2024 outlook reflects a better-than-expected start to the year with modest recovery in demand and progress on cost actions[4](index=4&type=chunk) - The company remains focused on digitizing & automating customers' operations with innovative solutions[4](index=4&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Q1 2024 net sales decreased by **16.4%** to **$1,175 million**, while gross margin improved to **47.9%**, with net income and EPS declines | Metric | 1Q24 | 1Q23 | Change | Note | | :--------------------------------- | :----- | :----- | :----- | :----- | | **Select reported measures:** | | | | | | Net sales (Millions) | $1,175 | $1,405 | (16.4 %) | YoY decrease | | Gross profit (Millions) | $563 | $667 | (15.6 %) | YoY decrease | | Gross margin (%) | 47.9 % | 47.5 % | 40 bps | YoY increase | | Net income (Millions) | $115 | $150 | (23.3 %) | YoY decrease | | Net income margin (%) | 9.8 % | 10.7 % | (90) bps | YoY decrease | | Net income per diluted share ($) | $2.23 | $2.90 | (23.1 %) | YoY decrease | | **Select Non-GAAP measures:** | | | | | | Adjusted net sales (Millions) | $1,175 | $1,405 | (16.4 %) | YoY decrease | | Organic net sales decline (%) | | | (16.8 %) | | | Adjusted gross profit (Millions) | $565 | $668 | (15.4 %) | YoY decrease | | Adjusted gross margin (%) | 48.1 % | 47.5 % | 60 bps | YoY increase | | Adjusted EBITDA (Millions) | $234 | $301 | (22.3 %) | YoY decrease | | Adjusted EBITDA margin (%) | 19.9 % | 21.4 % | (150) bps | YoY decrease | | Non-GAAP net income (Millions) | $147 | $204 | (27.9 %) | YoY decrease | | Non-GAAP diluted earnings per share ($) | $2.84 | $3.94 | (27.9 %) | YoY decrease | - Net sales decreased by **16.4%** year-over-year to **$1,175 million**[5](index=5&type=chunk) - Net income was **$115 million**, with diluted EPS of **$2.23**[5](index=5&type=chunk) - Adjusted EBITDA decreased year-over-year to **$234 million**[5](index=5&type=chunk) - The company is on track to achieve **$120 million** in annualized net expense savings from its Exit and Restructuring plans[5](index=5&type=chunk) [First-Quarter 2024 Financial Performance](index=2&type=section&id=First-Quarter%202024%20Financial%20Performance) Q1 2024 saw a consolidated organic net sales decline, with gross margin improvement offset by decreased operating income and EBITDA [Net Sales by Segment](index=2&type=section&id=Net%20Sales%20by%20Segment) Q1 2024 consolidated organic net sales decreased by **16.8%**, with EVM down **11.8%** and AIT down **25.3%** | Segment | 1Q24 Net Sales (Millions) | 1Q23 Net Sales (Millions) | YoY Change (%) | Organic Net Sales Decrease (%) | | :-------------------------------- | :------------------------ | :------------------------ | :--------- | :------------------------- | | Enterprise Visibility & Mobility (EVM) | $783 | $883 | (11.3%) | 11.8% | | Asset Intelligence & Tracking (AIT) | $392 | $522 | (24.9%) | 25.3% | | **Consolidated** | **$1,175** | **$1,405** | **(16.4%)** | **16.8%** | [Gross Profit and Margin](index=2&type=section&id=Gross%20Profit%20and%20Margin) Gross profit decreased, but gross margin improved to **47.9%** (adjusted **48.1%**) due to lower supply chain costs and better service margins | Metric | 1Q24 | 1Q23 | Change | | :---------------- | :----- | :----- | :----- | | Gross profit (Millions) | $563 | $667 | (15.6%) | | Gross margin (%) | 47.9% | 47.5% | 40 bps | | Adjusted gross margin (%) | 48.1% | 47.5% | 60 bps | - The increase in gross margin was primarily due to lower premium supply chain costs and improved software and service margins[7](index=7&type=chunk) - Volume deleveraging partially offset the gross margin improvements[7](index=7&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Operating expenses decreased to **$404 million** in Q1 2024, primarily driven by the impact of restructuring actions | Metric | 1Q24 (Millions) | 1Q23 (Millions) | Change (%) | | :---------------------- | :-------------- | :-------------- | :----- | | Operating expenses | $404 | $442 | (8.6%) | | Adjusted operating expenses | $348 | $384 | (9.3%) | - The decrease in operating expenses was primarily due to the impact of restructuring actions[8](index=8&type=chunk) [Net Income and EPS](index=2&type=section&id=Net%20Income%20and%20EPS) Both GAAP and Non-GAAP net income and diluted EPS decreased in Q1 2024 compared to the prior year | Metric | 1Q24 | 1Q23 | Change (%) | | :-------------------------- | :----- | :----- | :----- | | GAAP Net income (Millions) | $115 | $150 | (23.3%) | | GAAP Diluted EPS ($) | $2.23 | $2.90 | (23.1%) | | Non-GAAP Net income (Millions) | $147 | $204 | (27.9%) | | Non-GAAP Diluted EPS ($) | $2.84 | $3.94 | (27.9%) | [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q1 2024 was **$234 million** (**19.9%** margin), a decrease primarily due to higher operating expenses as a percentage of revenue | Metric | 1Q24 | 1Q23 | Change (%) | | :-------------------------- | :----- | :----- | :----- | | Adjusted EBITDA (Millions) | $234 | $301 | (22.3%) | | Adjusted EBITDA margin (%) | 19.9% | 21.4% | (150) bps | - The decrease in Adjusted EBITDA was primarily due to higher operating expense as a percentage of revenue, partially offset by higher gross margin[10](index=10&type=chunk) [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) As of March 30, 2024, the company maintained a stable balance sheet and generated positive operating and free cash flow | Metric | As of March 30, 2024 (Millions) | As of December 31, 2023 (Millions) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Cash and cash equivalents | $127 | $137 | | Total debt | $2,093 | $2,220 | | Net cash provided by operating activities (3 months) | $125 | ($76) (prior year) | | Capital expenditures (3 months) | $14 | $16 (prior year) | | Free cash flow (3 months) | $111 | ($92) (prior year) | | Net debt payments (3 months) | $133 | | [Cost Initiatives](index=2&type=section&id=Cost%20Initiatives) Zebra is implementing restructuring plans for **$120 million** in annualized savings, with **$120 million** in charges incurred by Q1 2024 - The company is executing its 2024 Productivity Plan and Voluntary Retirement Plan to generate cost efficiencies[12](index=12&type=chunk) - These Exit and Restructuring plans are expected to generate approximately **$120 million** of net annualized cost savings[12](index=12&type=chunk) - Approximately **$50 million** of operating expense savings were realized in 2023, with an incremental **$25 million** in Q1 2024[12](index=12&type=chunk) - The company expects approximately **$60 million** of incremental savings for the full year 2024[12](index=12&type=chunk) - Total charges associated with the plans are expected to be approximately **$130 million**, with **$120 million** incurred through Q1 2024[13](index=13&type=chunk) [Outlook](index=2&type=section&id=Outlook) The company provides specific financial projections for Q2 and the full year 2024, anticipating sales growth and strong free cash flow [Second Quarter 2024 Outlook](index=2&type=section&id=Second%20Quarter%202024%20Outlook) Q2 2024 net sales are projected to decrease by **1% to 5%**, with an Adjusted EBITDA margin slightly above **19%** and Non-GAAP diluted EPS of **$2.60 to $2.90** | Metric | Second Quarter 2024 Outlook | | :-------------------------- | :-------------------------- | | Net sales decrease (YoY) | 1% to 5% | | Foreign currency translation impact | Approximately 50 bps favorable | | Adjusted EBITDA margin (%) | Slightly above 19% | | Non-GAAP diluted EPS ($) | $2.60 to $2.90 | [Full Year 2024 Outlook](index=2&type=section&id=Full%20Year%202024%20Outlook) Full-year 2024 net sales growth is expected at **1% to 5%**, with an Adjusted EBITDA margin around **20%** and free cash flow of at least **$600 million** | Metric | Full Year 2024 Outlook | | :-------------------------- | :-------------------------- | | Net sales growth (YoY) | 1% to 5% | | Foreign currency translation impact | Negligible | | Adjusted EBITDA margin (%) | Approximately 20% | | Non-GAAP diluted EPS ($) | $11.25 to $12.25 | | Adjusted effective tax rate (%) | Approximately 17% | | Free cash flow (Millions) | At least $600 | [Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of Zebra Technologies' business, forward-looking statement disclaimers, and non-GAAP financial measure usage [About Zebra](index=3&type=section&id=About%20Zebra) Zebra Technologies provides solutions for workflow optimization and frontline empowerment, leveraging over 50 years of experience and a global partner ecosystem - Zebra helps organizations monitor, anticipate, and accelerate workflows by empowering their frontline and ensuring visibility, connectivity, and optimization[19](index=19&type=chunk) - Their portfolio spans software, robotics, machine vision, automation, and digital decisioning, backed by a +50-year legacy in scanning, track-and-trace, and mobile computing solutions[19](index=19&type=chunk) - Zebra has an ecosystem of **10,000 partners** across more than **100 countries**, with customers including over **80%** of the Fortune 500[19](index=19&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section cautions that actual results may differ from forward-looking statements due to various inherent risks and uncertainties - The press release contains forward-looking statements, and actual results may differ from those expressed or implied[20](index=20&type=chunk) - Statements are estimates based on current expectations, forecasts, and assumptions, subject to risks and uncertainties inherent in Zebra's industry and market conditions[21](index=21&type=chunk) - Key risk factors include customer acceptance, competitor offerings, emerging technologies, global market conditions, supply chain, operating costs, debt, interest rates, foreign exchange rates, governmental policies, litigation, and acquisition integration[21](index=21&type=chunk)[22](index=22&type=chunk) [Use of Non-GAAP Financial Information](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) Zebra uses Non-GAAP measures like adjusted net sales and EBITDA to provide clearer insights into ongoing operations and facilitate comparisons - The press release includes Non-GAAP financial measures like 'adjusted net sales,' 'Adjusted EBITDA,' 'Non-GAAP net income,' and 'free cash flow'[23](index=23&type=chunk) - Management presents these measures to focus on ongoing operations and believes they are useful for investors to perform meaningful comparisons[23](index=23&type=chunk) - The company also presents organic growth financial information to assess business performance excluding the impact of foreign currency exchange rate fluctuations[25](index=25&type=chunk) [Contacts](index=4&type=section&id=Contacts) Investor relations and media contact information is provided for Zebra Technologies - Investor Relations contact: Michael Steele, CFA, IRC, Vice President, Investor Relations (+1 847 518 6432, InvestorRelations@zebra.com)[26](index=26&type=chunk) - Media contact: Therese Van Ryne, Senior Director, External Communications (+1 847 370 2317, therese.vanryne@zebra.com)[26](index=26&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents Zebra Technologies' detailed balance sheets, statements of operations, and cash flows for Q1 2024 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$7,259 million**, total liabilities decreased, and total stockholders' equity increased as of March 30, 2024 | Metric (in millions) | March 30, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $127 | $137 | | Total Current assets | $1,627 | $1,672 | | Total Assets | $7,259 | $7,306 | | Current portion of long-term debt | $272 | $173 | | Total Current liabilities | $1,643 | $1,598 | | Long-term debt | $1,815 | $2,047 | | Total Liabilities | $4,090 | $4,270 | | Total Stockholders' Equity | $3,169 | $3,036 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2024 net sales were **$1,175 million**, with gross profit of **$563 million** and net income of **$115 million** | Metric (in millions, except per share) | Three Months Ended March 30, 2024 | Three Months Ended April 1, 2023 | | :------------------------------------- | :-------------------------------- | :------------------------------- | | Total Net sales | $1,175 | $1,405 | | Total Cost of sales | $612 | $738 | | Gross profit | $563 | $667 | | Total Operating expenses | $404 | $442 | | Operating income | $159 | $225 | | Income before income tax | $142 | $185 | | Net income | $115 | $150 | | Diluted earnings per share ($) | $2.23 | $2.90 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2024 saw **$125 million** net cash from operating activities and **$111 million** in free cash flow, with **$124 million** used in financing | Metric (in millions) | Three Months Ended March 30, 2024 | Three Months Ended April 1, 2023 | | :------------------------------------- | :-------------------------------- | :------------------------------- | | Net cash provided by (used in) operating activities | $125 | ($76) | | Net cash used in investing activities | ($11) | ($17) | | Net cash (used in) provided by financing activities | ($124) | $70 | | Net decrease in cash and cash equivalents | ($11) | ($24) | | Cash and cash equivalents at end of period | $127 | $85 | [Reconciliation of Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to Non-GAAP financial metrics, including net sales, gross margin, net income, EBITDA, and free cash flow [Organic Net Sales Decline Reconciliation](index=8&type=section&id=Organic%20Net%20Sales%20Decline%20Reconciliation) Q1 2024 consolidated organic net sales declined by **16.8%**, slightly higher than the GAAP decline due to foreign currency impact | Metric | AIT (%) | EVM (%) | Consolidated (%) | | :-------------------------------- | :----- | :----- | :----------- | | Reported GAAP Consolidated Net sales decline | (24.9) | (11.3) | (16.4) | | Impact of foreign currency translations | (0.4) | (0.5) | (0.4) | | **Consolidated Organic Net sales decline** | **(25.3)** | **(11.8)** | **(16.8)** | [GAAP to Non-GAAP Gross Margin Reconciliation](index=9&type=section&id=GAAP%20to%20Non-GAAP%20Gross%20Margin%20Reconciliation) Adjusted gross margin for Q1 2024 was **48.1%**, slightly higher than GAAP due to the exclusion of share-based compensation | Metric | March 30, 2024 | April 1, 2023 | | :-------------------- | :------------- | :------------ | | GAAP Reported Gross profit (Millions) | $563 | $667 | | GAAP Gross Margin (%) | 47.9% | 47.5% | | Adjusted Gross profit (Millions) | $565 | $668 | | Adjusted Gross Margin (%) | 48.1% | 47.5% | | Adjustment (Share-based compensation) (Millions) | $2 | $1 | [GAAP to Non-GAAP Net Income Reconciliation](index=10&type=section&id=GAAP%20to%20Non-GAAP%20Net%20Income%20Reconciliation) Non-GAAP net income for Q1 2024 was **$147 million** (**$2.84** diluted EPS), higher than GAAP due to various adjustments | Metric | March 30, 2024 | April 1, 2023 | | :------------------------------------- | :------------- | :------------ | | GAAP Net income (Millions) | $115 | $150 | | Total adjustments (Millions) | $32 | $54 | | Non-GAAP Net income (Millions) | $147 | $204 | | GAAP Diluted earnings per share ($) | $2.23 | $2.90 | | Non-GAAP Diluted earnings per share ($) | $2.84 | $3.94 | | **Key Adjustments (pre-tax):** | | | | Amortization of intangible assets (Millions) | $26 | $26 | | Share-based compensation (Operating expenses) (Millions) | $19 | $22 | | Exit and restructuring costs (Millions) | $10 | $10 | | Forward interest rate swap (gain) loss (Millions) | ($20) | $7 | [GAAP to Non-GAAP EBITDA Reconciliation](index=11&type=section&id=GAAP%20to%20Non-GAAP%20EBITDA%20Reconciliation) Q1 2024 Adjusted EBITDA was **$234 million**, reconciled from GAAP net income by adding back interest, taxes, depreciation, amortization, and other adjustments | Metric | March 30, 2024 | April 1, 2023 | | :------------------------------------- | :------------- | :------------ | | GAAP Net income (Millions) | $115 | $150 | | EBITDA (Non-GAAP) (Millions) | $202 | $268 | | Total adjustments to EBITDA (Millions) | $32 | $33 | | Adjusted EBITDA (Non-GAAP) (Millions) | $234 | $301 | | Adjusted EBITDA % of Adjusted Net Sales | 19.9% | 21.4% | | **Key Adjustments:** | | | | Share-based compensation (Cost of sales) (Millions) | $2 | $1 | | Share-based compensation (Operating expenses) (Millions) | $19 | $22 | | Exit and restructuring costs (Millions) | $10 | $10 | [Free Cash Flow Reconciliation](index=11&type=section&id=Free%20Cash%20Flow%20Reconciliation) Q1 2024 free cash flow was **$111 million**, derived from operating cash flow minus capital expenditures | Metric | Three Months Ended March 30, 2024 | Three Months Ended April 1, 2023 | | :------------------------------------- | :-------------------------------- | :------------------------------- | | Net cash provided by (used in) operating activities (Millions) | $125 | ($76) | | Less: Purchases of property, plant and equipment (Millions) | ($14) | ($16) | | **Free cash flow (Non-GAAP) (Millions)** | **$111** | **($92)** | - Free cash flow is defined as Net cash provided by (used in) operating activities minus purchases of property, plant and equipment[45](index=45&type=chunk)

Zebra Technologies Corporation (ZBRA) is slated to release first-quarter 2024 results on Apr 30, before market open.The Zacks Consensus Estimate for earnings has decreased by a penny in the past 60 days. The company has a decent earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters, while missing in one. The average beat was 4.8%The Zacks Consensus Estimate for revenues is pegged at $1.14 billion, indicating a decline of 18.5% from the year-ago q ...

Zebra Technologies Corporation (ZBRA) is gaining from strength in the Asset Intelligence and Tracking segment, acquired assets and shareholder-friendly moves.Let’s delve into the factors that make this current Zacks Rank #1 (Strong Buy) company a smart investment choice at the moment.Business Strength: Zebra Technologies is benefiting from growth across services, software and radio frequency identification (RFID) products. Improving supply chains and lower product lead times will benefit the company’s growt ...

Zebra Technologies Corporation (ZBRA) has been benefiting from healthy demand for RFID (radio frequency identification) and software products. Improving supply chains and lower product lead times are expected to boost the company’s growth in the quarters ahead. Pricing actions and strong sales of RFID products are aiding the company’s Asset Intelligence and Tracking segment. Higher sales of services and software, and contributions from recent acquisitions bode well for the Enterprise Visibility & Mobility s ...