Zebra Technologies beats on sales but misses on profit, and guides fourth-quarter growth of 10% to 14%

Revenue of $1.61bn topped forecasts, but earnings fell short, and the outlook leans on currency for part of its growth and on a 22% margin for its profit.

Zebra Technologies sold more than expected in the third quarter but earned less. Earnings per share were $4.95, $0.05 short, while revenue was $1.61bn against $1.59bn expected.

The outlook asks for profit to catch up with sales. Zebra expects fourth-quarter sales to grow 10% to 14% from a year earlier. About 150 basis points of that, a basis point being a hundredth of a percentage point, comes from favourable currency moves. Part of the headline growth will therefore not come from the business itself.

On profit, Zebra expects an adjusted EBITDA margin of about 22%. It guides non-GAAP earnings per share of $5.00 to $5.40 for the quarter, assuming an adjusted effective tax rate of about 19%. The margin and the tax rate carry that range.

Chief Executive Bill Burns said Elo Touch contributed to double-digit growth. He said stronger memory supply and pricing actions helped the company sustain growth while holding adjusted EBITDA margin flat from a year earlier.

Zebra also expects full-year free cash flow of at least $1bn.