Pitney Bowes Earnings: Two Straight Quarters of Profit Drops

S&P 500 (NYSE:SPY) component Pitney Bowes Inc. (NYSE:PBI) reported its results for the third quarter. Pitney Bowes provides mail processing equipment and integrated mail solutions, including postage meters and office supplies.

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Pitney Bowes Inc. Earnings Cheat Sheet

Results: Net income for Pitney Bowes Inc. fell to $76.5 million (38 cents per share) vs. $172.8 million (85 cents per share) a year earlier. This is a decline of 55.7% from the year-earlier quarter.

Revenue: Fell 6.5% to $1.22 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Pitney Bowes Inc. reported adjusted net income of 47 cents per share. By that measure, the company fell short of mean estimate of 48 cents per share. It fell short of the average revenue estimate of $1.29 billion.

Quoting Management: Commenting on the quarter, Chairman, President and Chief Executive Officer Murray D. Martin said, “We continue to execute our strategy to be a leading provider of customer communications solutions; however, our earnings performance during the quarter did not meet our expectations. In the third quarter, our results continued to be affected by global economic weakness, especially in International Mailing and Software where public sector spending remains constrained. However, we were pleased to see gradually improving trends in North America Mailing, where equipment sales experienced a slower rate of decline and the best year-over-year comparisons in six quarters.” Mr. Martin added, “We continue to take actions to drive sustainable long-term growth for Pitney Bowes and our shareholders and are focused on positioning Pitney Bowes to succeed in the changing market landscape. We decided to exit the International Mail Services business related to the delivery of international mail and catalogs. As we focus on the higher growth opportunities, we are growing our participation in ecommerce opportunities related to cross border parcel shipping services. One example is our collaboration with eBay to facilitate cross border ecommerce by providing technology solutions and parcel shipping services. Additionally, to address our changing business mix and current economic pressures, we are initiating actions to further streamline the business through organizational and management consolidations to further reduce our cost structure. And, we will further realign future investments in the business as we focus on higher growth opportunities.”

Key Stats:

Revenue has dropped for four quarters in a row. Revenue declined 5.2% to $1.25 billion in the second quarter. The figure fell 5.1% in the first quarter from the year earlier and dropped 6.5% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last two quarters. In the second quarter, net income fell 1.3% from the year-earlier quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by one cent, and in the first quarter, it was ahead by 2 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 56 cents a share to 53 cents over the last ninety days. The average estimate for the fiscal year is $2.03 per share, down from $2.07 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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