Al Root

Shares of the automation technology provider Zebra Technologies rose on better-than-expected earnings, but relief over tariffs likely contributed to the move as well.

Tuesday morning, Zebra reported earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $292 million, with earnings per share of $4.02. Sales were $1.3 billion. Wall Street was looking for Ebitda of $270 million, EPS of $3.62, and sales of just under $1.3 billion, according to FactSet.

Sales grew 11.3% year over year. Ebitda improved 24.8% on a 2.9 percentage-point improvement in profit margins.

Zebra shares were up 7.7% at $262.11, while S&P 500 futures were down 0.1%, and Dow Jones Industrial Average futures were up 0.3%.

"We delivered first-quarter sales and earnings results above the high end of our outlook, reflecting strong demand, supported by our team's excellent execution," said CEO Bill Burns in a news release. "Demand trends have continued to be positive into the second quarter, and we are leaving our full-year outlook unchanged, with the exception of the direct cost of tariffs."

Tariffs have been a concern. Coming into Tuesday trading, shares were down 37% year to date and down 15% since President Donald Trump's April 2 announcement of a 10% tariff on almost all countries, plus higher, so-called reciprocal rates on many countries. Zebra depends on parts made overseas, including in Mexico and China.

Management's guidance, however, looks better than feared, as tariffs didn't derail the forecast. For the second quarter, Ebitda is expected to be about $244 million, including $25 million to $30 million of tariff effects. Wall Street is projecting Ebitda of $247 million, according to FactSet.

The same goes for the full-year number. The company expects a tariff impact of $70 million, which would put Ebitda in the range of $1 billion to $1.1 billion. Wall Street projects just over $1 billion.

Tariffs are still raising costs, but some companies are able to manage through them. Tariff effects also didn't derail guidance for GE Aerospace, Honeywell, TE Connectivity, and GE Vernova, to name a few.

That is good news.

Write to Al Root at allen.root@dowjones.com

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April 29, 2025 09:00 ET (13:00 GMT)

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