(Reuters) – Barcode scanner maker Zebra Technologies projected a smaller-than-expected drop in first-quarter net sales on Thursday, a sign of stabilizing demand for its products as customers continue to clear existing inventory.
Shares of the company rose more than 10% in morning trade.
Zebra, which counts U.S. Postal Service and Walgreens Boots Alliance as its customers, saw improvement in orders as businesses ramp up their digitization efforts.
“Entering 2024, distributor inventories are aligned with the current demand environment. Although we are seeing some improvement in order activity, we are not yet seeing signs of a broad market recovery,” CEO Bill Burns said in a statement.
The company expects total charges related to its cost-cutting measures to be about $130 million, up from the previously estimated $105 million, and anticipates completing it by mid-2024.
Zebra expects first-quarter net sales to decline between 17% and 20% from a year earlier, compared with estimates of a decline of about 24%, according to LSEG data.
The maker of handheld computers expects 2024 net sales to be in the range between of 1% decline and 3% growth compared with 2023.
Zebra posted fourth-quarter net sales of $1.01 billion, beating analysts’ average estimate of $999.4 million.
Excluding items, its earnings slumped 64% from a year earlier to $1.71 per share, but exceeded the estimate of $1.66 per share.
Rival Honeywell International forecast a weak first quarter after falling short of sales estimates for the fourth quarter earlier this month.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Dhanya Ann Thoppil and Vijay Kishore)
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