Raising Estimates Significantly; Large Mobile Deals Drive 2Q Beat
- 2Q17 (June) adjusted EPS of $1.51 (vs $1.34 a year earlier), rose 13%, 3 cents above our estimate, aided by organic growth of 6.4%;
- Zebra’s debt refinancing subsequent to quarter-end is expected to save over $45 million in annual interest expense and reduce the weighted average interest rate by 2 points to less than 4%;
- Driven primarily by savings from the debt refinancing, our 2017 EPS projection is now $6.80 (from $6.55), up 20% from 2016;
- With a full year’s benefit from the refinancing, our 2018 EPS estimate is now $7.78 (from $7.29), up 14% from our 2017 projection.
Zebra Technologies designs, manufactures, and sells a range of automatic identification and data capture products, including: mobile computers, barcode scanners and imagers, radio frequency identification devices (RFID) readers, printers for barcode labeling and personal identification, real-time location systems, related accessories and supplies, such as labels and other consumables, and software utilities and applications. The company has two segments: Asset Intelligence and Tracking, which includes barcode and card printing, supplies, services, location solutions, and retail solutions; and Enterprise Visibility and Mobility, which includes mobile computing, data capture, RFID, and services.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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