ATM, security and election systems maker Diebold Inc. (DBD), Tuesday reported a loss for the third quarter versus a profit last year, primarily due to a significant loss on the sale of discontinued operations. Revenues declined 26% from last year comparable period. Looking ahead, the company revised its earnings guidance for 2009 anticipating a broader revenue decline. The company's shares are trading down more than 6% on the NYSE.
Third-quarter net loss attributable to the North Canton, Ohio-based Diebold was $7.15 million or $0.11 per share, compared with net income of $46.51 million or $0.70 per share in the prior year period.
The three-month period recorded an income from continuing operations of $24.48 million or $0.37 per share, compared with $47.61 million or $0.72 per share last year. The company realized a loss of $31.4 million from the previous closure of its EMEA-based enterprise security operations and also incurred restructuring charges of $0.02 per share, related to severance costs.
Excluding these unusual charges, non-GAAP earnings per share from continuing operations for the quarter declined 67% to $0.39 from $1.18 in the year-ago period. On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share for the quarter.
Net sales for the quarter dropped 26% to $645.22 million from $869.08 million in the comparable period. Analysts estimated revenues of $737.50 million for the quarter.
Revenue decline for the period was led by lower demand in the Financial self-service segment, revenues from which dropped 21% year-on-year to $485.34 million, further hurt by a similar 21% decline in security solutions net sales to $158.37 million. Net sales also suffered the absence of $58.58 million from the sale of Brazilian election systems that helped sales in the year-ago period.
Geographically, revenue decline for the third quarter was shared by a 24% year-on-year fall in Americas region to $475.52 million, a 20% fall in the Asia Pacific segments to $98.14 million and a 40% decline in sales from other regions.
Total cost of goods favorably declined to $493.01 million from $641.15 million year-ago. The company said it continued to " significantly reduce operating expenses on a dollar basis", bringing down the charges to $121.04 million from $161.88 million last year. Operating margins still suffered a decline from year-ago data, dropping to 4.8% from 7.6%.
For the first nine months of this year, net income attributable to the company declined to $24.92 million or $0.37 per share from $87.53 million or $1.32 per share a year ago. Adjusted net income per share from continuing operations declined to $1.36 from $2.27 last year. Revenues for the nine-month period dropped to $1.99 billion from $2.29 billion in the comparable period of 2008.
Looking forward to fiscal 2009, the company now expects GAAP earnings per share to be in the range of $1.34 to $1.39 compared with prior range of $1.34 to $1.52. Non-GAAP earnings per share for the year are now projected to be between $1.75 and $1.80 compared with previous range of $1.70 - $1.90. Full-year total revenues are currently anticipated to decline 13% - 9% versus its earlier range of 13% - 7% decline. Analysts estimate earnings of $1.80 per share for the year, on revenues of $2.86 billion.
DBD is currently trading down $1.96 or 6.54% at $27.99 on the New York Stock Exchange.
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