Zebra Technologies (ZBRA) stock jumped on Thursday after the maker of asset-tracking technology leapt over Wall Street's targets for the fourth quarter.
Zebra, known for its bar-code and RFID tags and scanners, earned $1.93 a share excluding items in Q4, up 48% year over year and 20 cents better than analysts were expecting. Sales dipped 1% to $944 million, but beat Wall Street's target for $931 million.
Zebra stock broke out of a seven-week flat base with a buy point of 88.13 on Thursday. It jumped as much as 9.2% to 93.61, an 18-month high, in morning trading on the stock market today. Shares ended the day up 4.9% at 89.90.
While earnings growth was solid, the Lincolnshire, Ill.-based company reported its fourth straight quarter of declining sales on a year-over-year basis.
IBD'S TAKE: Zebra Technologies stock has an IBD Composite Rating of 84, meaning it has outperformed 84% of stocks in key metrics over the past 12 months. But it ranks No. 3 out of 40 stocks in IBD's Electronics-Miscellaneous Products industry group. To see which companies lead the group, visit the IBD Stock Checkup.
Zebra's outlook for the current quarter was roughly in line with Wall Street's targets. Based on the midpoint of its guidance, Zebra expects to earn $1.30 a share ex items, up 29%, on sales of $848 million, down a fraction, in the first quarter.
"Zebra entered 2017 with an unmatched portfolio of innovative solutions, a solid backlog, and a healthy pipeline of opportunities to drive profitable sales growth," Zebra CEO Anders Gustafsson said in a statement. "Additionally, we are committed to further deleveraging our capital structure and are on track to exceed our two-year debt paydown target of $650 million."
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