What happened
Shares of Zebra Technologies (ZBRA 1.36%), the company best known for making bar codes, RFID tags, scanners, and printers, was falling today after it posted disappointing results in its second-quarter earnings report.
As of 11:32 a.m. ET, the stock was down 18.6%.
So what
Revenue in the quarter was down 17.3% to $1.21 billion, well below the analyst consensus at $1.31 billion, as the company continued to struggle with softening demand and cautious consumer spending in the retail and logistics end markets.
Gross margin in the quarter did improve modestly from 45.9% to 47.9% due to improving supply chain costs and a more favorable business mix, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 20% to $257 million.
Adjusted earnings per share (EPS), meanwhile, sank 29% to $3.29, which essentially matched analyst expectations at $3.28.
CEO Bill Burns acknowledged the headwinds but said, "While we are revising our outlook downward, we remain confident in our ability to benefit from the long-term secular megatrends to digitize and automate workflows. We are taking action to drive sales and enhance profitability, which we believe will position us for success in the current environment and in the future."
Now what
Looking ahead, management expects revenue to decline between 30% and 35% in the third quarter, which is much worse than the analyst consensus of a 10.8% decline. It also forecast adjusted EPS of just $0.60 to $1.00, compared to analyst estimates of $3.77.
Its full-year forecast was also disappointing, calling for revenue to decline between 20% and 23%, compared to an expected decline of just 4.9%.
Like other tech companies, Zebra experienced a boom in demand during the pandemic, but it's struggled to grow since then. The latest results show investors will have to be patient with a turnaround.