Zebra Technologies shares dropped 13.1% in premarket trading after the company reported third-quarter 2026 results that exceeded analysts’ estimates but issued a fourth-quarter earnings outlook just below consensus. Investors focused on the forecast and lower gross margin despite the stronger-than-expected quarter.
The enterprise data capture and workflow automation company reported adjusted earnings of $4.95 per share, compared with the analyst consensus of $4.89. Revenue reached $1.61 billion, above the $1.57 billion estimate and up 22.3% from the same period a year earlier.
For the fourth quarter, Zebra forecast adjusted earnings per share of $5.00 to $5.40. The midpoint of $5.20 was slightly below the $5.21 analyst consensus.
Gross margin fell to 45.7%, down from 48.0% a year earlier. The company attributed the decline largely to higher memory component costs and an unfavorable business mix. CEO Bill Burns pointed to strong execution and broad-based demand as drivers of the quarter, but the margin pressure and outlook weighed on the shares.
Wall Street Zen upgraded Zebra to a “Strong-Buy” rating, though that offered little relief from the negative reaction. The broader market was mixed: the S&P 500 was essentially flat, the Dow Jones edged lower and the Nasdaq rose slightly.
Sources: Investing.com News.