Pitney Reports In-Line 1Q Earnings - Analyst Blog
April 30 2013 - 9:00AM
Zacks
Pitney Bowes
Inc.(PBI) reported first-quarter 2013 pro forma earnings
per share of 42 cents, which was in line with the Zacks Consensus
Estimate. Quarterly earnings were down 19.2% year over year from 52
cents per share. Earnings for the first quarter 2012 include net
tax benefit of 37 cents as a result of an agreement between the
company and the IRS on the tax treatment of a number of issues as
well as revised tax calculations.
GAAP earnings for the quarter were
34 cents a share, including costs associated with the recent debt
tender.
Total Revenue
Total revenue was $1.17 billion,
down 4.4% year over year from $1.22 billion. The top line benefited
from growth in the Production Mail and Mail Services segments. This
was fully offset by continued decline of recurring revenue streams
in the Small and Medium Business segment. Revenues were also
in line with the Zacks Consensus Estimate.
Segment
Performance
Small and Medium Business (SMB)
Solutions segment sales declined 5% year over year on a constant
currency basis to $598 million, as a result of a 7% fall in North
America Mailing revenues. Revenues in International Mailing segment
was flat year over year.
Enterprise Business Solutions
segment sales increased by 4% year over year to $569 million, led
by a 3% increase in revenue from worldwide production mail and 4%
revenue growth in Mail services. This was partially offset by a 20%
revenue decline in Software, 2% decline in Management services and
a 16% decline in Marketing services.
Income
The company incurred total SG&A
expense of approximately $377.2 million in the quarter versus
approximately $405.5 million in the first quarter of 2012. R&D
expense was $33.3 million versus $34.1 million. Income from
continuing operations of the company was $101.7 million compared
with $161 million in the prior-year period. Lower income was
attributable to higher cost of equipment sales and higher cost of
business services.
Balance Sheet
Cash and cash equivalents were
$909.7 million with long-term debt of $3.6 billion and
shareholder’s equity of $73.1 million compared to prior-year
figures of $913.2 million, $3.7 billion and shareholders’ equity of
$110.6 million, respectively.
Free cash flow for the quarter was
$107 million. During the quarter, the company used $75 million of
cash for dividends and $16 million for restructuring payments.
Initiatives during the
Quarter
During the quarter, the company
collaborated with GrayHair Software Inc. to improve its customer
service solutions with IMb (Intelligent Mail Barcode) compliance
and mail tracking in the U.S. his new mail tracking software,
MailTrak with Commingle solutions will help Pitney’s Presort
Services Customers significantly who are looking for greater postal
discounts with better visibility of their mails. This service will
be offered in four different options.
Outlook
Concurrent with the earnings
release, Pitney reiterated its guidance for 2013. The company
expects its revenue growth trend to improve in 2013 with a number
of initiatives designed to drive new growth opportunities. In 2013,
the company expects revenue growth in its Enterprise Solutions
Group and an improvement in revenues in its SMB Solutions Group
though the segment is expected to witness negative growth.
For 2013, revenue growth, excluding
the impact of currency, is expected to be in the range of flat to
up 3%. The company expects earnings per share from continuing
operations to be in the range of $1.85 to $2.00. Free cash flow for
2013 is expected to be in the range of $600 million to $700
million.
Pitney Bowes currently has a Zacks
Rank #3 (Hold). However, some other companies that can be
considered at the moment are Progressive Software
Corp. (PRGS), which has a Zacks Rank #1 and
Symantec Corp. (SYMC) and Adobe Systems
Inc. (ADBE) having Zacks Rank #2 (Buy).
ADOBE SYSTEMS (ADBE): Free Stock Analysis Report
PITNEY BOWES IN (PBI): Free Stock Analysis Report
PROGRESS SOFTWA (PRGS): Free Stock Analysis Report
SYMANTEC CORP (SYMC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jul 2023 to Jul 2024