Zebra Technologies Sees Q2 EPS Above Market View; Withdraws FY20 Outlook

(RTTNews) - Zebra Technologies Corp. (ZBRA), while reporting weak earnings and sales in its first quarter, said Tuesday that it sees second-quarter net sales to decrease approximately 11 percent to 17 percent from last year due to an anticipated recessionary global environment from COVID-19.

For the second quarter, adjusted earnings per share are expected to be in the range of $2.10 to $2.50. Adjusted EBITDA margin is expected to be approximately 18 percent to 19 percent.

On average, nine analysts polled by Thomson Reuters expect earnings of $1.76 per share. Analysts' estimates typically exclude special items.

Further, the company withdrew its prior full-year 2020 financial outlook due to the extremely low visibility of COVID-19 impacts beyond the second quarter.

The company expects net sales, adjusted EBITDA margin, and free cash flow to be lower than last year, which are being addressed through cost actions to enhance profitability and cash flow.

As said earlier, the company is diversifying the sourcing of most of its U.S. volumes out of China. Through the first nine months of 2020, these actions are expected to result in approximately $20 million of one-time pre-tax charges plus approximately $10 million of capital expenditures.

This project is expected to be substantially complete by mid-2020 despite disruption from COVID-19 in southeast Asia.