Despite a 21.5% increase in net sales and an improvement from 47.6% to 50.3% in operating margins from Q2 2007, ZBRA stock prices still dropped. Net income for ZBRA was decreased by exit costs incurred in the closing manufacturing plants located in Rhode Island, California, and Illinois, outsourcing all but the Rhode Island plant to China. As a result, operating expenses rose 39.1% from Q2 2007.
The Q4 earnings report for Zebra surpassed analyst expectations of 42 cents per share, earning 45 cents a share.
Zebra announced a net income of $26.96 million or 39 cents per share, compared to a net loss of $4.26 million or 6 cents per share last year, while the analysts were expecting EPS of 38 cents. The Q3 revenue was $217.2 million, a 16.5 percent increase from $186.3 million last year, while the analysts were expecting revenue of $213.3 million. The strong result was mainly due to higher sales and gross margin improvement.