What happened

Shares of Zebra Technologies (NASDAQ:ZBRA), which makes barcode scanners, printers, and handheld readers, surged by 28.8% in February according to data from S&P Global Market Intelligence. The move follows an excellent earnings report released in the middle of the month.

Zebra's solutions are based on helping businesses improve productivity. Key end-market customers include the manufacturing sector, transportation, and logistics, retail, and e-commerce companies. Using Zebra's barcode printers and data capture tools (scanners and readers) its customers can better manage and monitor their inventory and point-of-sale operations.

Logistics workers using scanners.

Image source: Getty Images.

The company was hit hard by the pandemic as customers held back from orders while their own operations were shut down. However, the recovery is happening a lot faster than most expected.

For example, Zebra started the fourth quarter expecting adjusted net sales to increase by 3% to 7%, only for the actual figure to come in at 9.7%.

Moreover, management expects adjusted net sales to rise by a whopping 25% to 29% in the first quarter on a year-over-year basis. For the full year 2021 adjusted net sales are expected to rise 10% to 14% with underlying sales (adjusted for an acquisition and foreign currency movements) expected to be up 7% to 11%. Investors in Zebra can feel confident in management's guidance because its rival Honeywell International also reported a very good set of results and gave a good outlook on its productivity solutions and services business.

So what

The excellent results and outlook signal that the market is recovering at a good rate from the impact of the pandemic. Besides, the pandemic may well spur customers to prioritize investment in automation as a way to avoid future problems. That's good news for Zebra and Honeywell as it will encourage investment in data capture and barcode scanners as automated processes still need to be monitored by humans.

Now what

Given the recent history of exceeding sales guidance on quarterly earnings calls, investors will be looking for more of the same in the future. A good place for Zebra investors to start would be by keeping an eye out for what Honeywell says about its productivity solutions business when management gives its presentations. That's something to keep an eye out for in 2021.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.