Pitney Bowes Inc. (PBI) Tuesday reported a sharp decline in first-quarter profit, hurt by a four percent drop in revenues and higher expenses. The company's quarterly earnings also came in short of Wall Street estimates.
Pitney Bowes slashed its net earnings outlook for fiscal year 2013, to reflect one-time charges incurred in the first quarter. Shares of the company dived over 16 percent in morning trade on the New York Stock Exchange.
Pitney Bowes makes software and hardware and provides services related to documents, mailing, and shipping. The company's scope of operations include direct mail and call center communications solutions.
The Stamford, Connecticut-based company reported quarterly net income to common shares of $67.5 million or $0.33 per share, compared to $158.7 million or $0.79 per share last year.
Results for the quarter include a $0.11 per share tax benefit, plus a $0.10 per share tax benefit in discontinued operations.
Excluding items, adjusted earnings for the quarter were $0.42 per share, compared to $0.52 per share in the prior year. On average, four analysts polled by Thomson Reuters expected earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenues for the quarter were $1.17 billion, compared to $1.22 billion a year ago.
Analysts on consensus estimated revenues of $1.20 billion for the quarter.
Results were hurt by lower recurring revenue streams in the Small and Medium Business group, reduced licensing revenue in the Software segment, and some pricing pressures in the Management Services business. Growth was seen in the Production Mail and Mail Services segments.
Expenses for the quarter were higher at $1.065 billion, compared to $1.059 billion, due to higher cost of equipment and other overheads.
For fiscal year 2013, Pitney Bowes slashed its net earnings guidance to reflect a first quarter charge of $0.08 per share for costs related to its recent debt tender. It now expects net earnings from continuing operations of $1.77 to $1.92 per share for the year.
The company continues to expect revenue, excluding the impacts of currency, to be flat to 3 percent growth when compared to 2012, and adjusted earnings of $1.85 to $2.00 per share for 2013.
Analysts currently estimate earnings of $1.94 per share on revenues of $4.85 billion for 2013.
Pitney Bowes's board has approved a reduced second quarter dividend of 18.75 cents per common share, payable June 12 to stockholders as of May 10.
The board also declared a cash dividend of 53 cents per share on its $2.12 convertible preference stock, payable July 1 to stockholders as of June 14, and a cash dividend of 50 cents per share on its 4 percent convertible cumulative preferred stock, payable August 1 to stockholders as of record July 15.
Pitney Bowes stock is trading at $13.60, down $2.60 or 16.05%, on a volume of 15.8 million shares.
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