Zebra Technologies Stock Gains After Q3 Beat, Solid Q4 Outlook

Zebra Technologies Corp ZBRA reported third-quarter FY21 non-GAAP net sales growth of 26.6% year-on-year to $1.44 billion, beating the consensus of $1.40 billion. Consolidated organic net sales for the third quarter increased 23.2%.
Tangible products' net sales grew 27.6% Y/Y to $1.24 billion. Services and software revenue rose 22.5% Y/Y to $196 million.
Net sales in the Enterprise Visibility & Mobility (EVM) rose 32.1% Y/Y to $1.05 billion. Asset Intelligence & Tracking (AIT) segment net sales grew 13.9% Y/Y to $386 million.
Margins: The non-GAAP gross margin expanded 130 bps to 45.1% from a favorable business mix and higher service and software margin.
The non-GAAP EBITDA margin expanded 140 bps to 21.7%.
Non-GAAP EPS of $4.55 beat the consensus of $4.06.
Zebra generated $836 million of operating cash flow for the nine months ended October 2. Zebra held $307 million in cash and equivalents.
"We entered the fourth quarter with a strong order backlog and robust pipeline of business which supports our strong sales outlook despite extended lead times for certain products," said CEO Anders Gustafsson.
Outlook: Zebra sees Q4 net sales to increase 8% - 12%, representing $1.42 billion - $1.47 billion, above the consensus of $1.41 billion.
It sees Q4 Non-GAAP EPS of $4.20-$4.50, above the consensus of $4.17.
Price Action: ZBRA shares traded higher by 3.21% at $560 in premarket on the last check Tuesday.

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