Zebra Technologies announced its Q2 2017 earnings on August 8, beating analyst expectations on EPS by $0.03 and revenues by $18.07M. The company saw an improvement over Q2 2016 across all regions with its various product lines; this included 9% sales growth in North America driven by an especially strong performance in mobile computing, 4% increase in EMEA, and an 11% rise in Latin America brought on by exceptionally strong data capture, printing, and supplies sales. Demand from the retail, transportation, and health care verticals continues to surge, bringing with it tremendous growth opportunity for Zebra. Enterprise segment sales (mobile computing and data capture) increased 7.9% to $584M, with double-digit growth in mobile computing driven by high demand for its Android portfolio. Legacy business sales—including barcode printers, card printers, consumables & supplies, and location services—were up 3.7% to $313M. Zebra also saw its gross margin go down to 46.0%, compared to 46.4% in the prior year period due to changes in business and sales mix. The company went live with its consolidated ERP and IT system in May with an aim to fully integrate and standardize its processes across the distributed global operational setup. Zebra believes this will help further increase productivity across the organization while channeling the One Zebra message to its partners and customers.
The following are some of the key highlights from Zebra’s Q2 2017 earnings conference call:
From VDC’s perspective, Zebra is now showing considerable strength in performance across product categories in its core markets of Americas and Europe. However, the company has its work cut out for it in Asia where it faces significant pressures from lower cost, local competitors, particularly on the data capture and printing side. Zebra continues to expect growth for the rest of the year backed by a strong pipeline across all major product categories. VDC believes that the company’s efforts to extend its vision of EAI along with the ability to capitalize on significant cross-sell and up-sell opportunities across its product portfolio will serve to present a unified message to both partners and customers. This is especially important as the company looks to strengthen its run rate business beyond mobile computing with its newly launched industrial thermal barcode printers and data capture devices.
For more information on our coverage of the markets in which Zebra competes, download the following - 2017 AutoID & Data Capture Research Outline and 2017 Enterprise Mobility & Connected Devices Research Outline.