Wow. Has it really been a year since I last wrote about specialty-printer maker Zebra Technologies
What analysts say:
- Buy, sell, or waffle? Six analysts ride herd on Zebra, giving it four buy ratings and two holds.
- Revenue. On average, they're looking for 8% quarterly sales growth to $226 million.
- Earnings. Profits are predicted to add a penny for $0.43 per share.
What management says:
Another good reason to check back on Zebra today: Big changes are afoot. (Ahoof?) Earlier this month, management announced a significant change in how it does business: It will stop building its printers in-house and outsource manufacturing to Jabil Circuit
Financially, I'd expect this to raise margins in the long term (thanks to comparative advantage, specialization, economies of scale, and similar Adam Smith-ish concepts). But in the short term, we're told to expect 650 "production-related" layoffs at Zebra as the shift in manufacturing progresses over the next 18 to 24 months. That will entail the usual restructuring and severance charges to earnings -- about $18 million this year, and another $6 million to $8 million in 2009.
What management does:
Why the shift in strategy? Well, gross margins have actually been doing pretty well at Zebra lately, but operating margins have been sliding for quite a while.
7/06 |
9/06 |
12/06 |
3/07 |
6/07 |
9/07 |
|
---|---|---|---|---|---|---|
Gross |
48.6% |
48.0% |
47.2% |
47.4% |
47.4% |
47.6% |
Operating |
20.6% |
20.2% |
19.3% |
19.0% |
18.0% |
17.8% |
Net |
15.1% |
10.5% |
9.3% |
9.0% |
8.5% |
11.9% |
One Fool says:
Seeing as Zebra's customer list features such notable Southeast Asian-based names as Nissan
What was Zebra up to when last we checked in on it? Find out in: