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Pitney Bowes (PBI) Q1 Earnings Beat Estimates, Revenue Up Y/Y

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Pitney Bowes Inc. (PBI - Free Report) reported first-quarter 2021 adjusted earnings of 7 cents per share, which beat the Zacks Consensus Estimate by 40% and increased 40% year over year.  

Following the strong top-line performance, shares of Pitney Bowes are up 1.5% in the premarket trading on May 3.

Notably, total revenues rose 15% year over year to $915 million. Adjusting for foreign currency exchange, revenues increased 14% year over year to $906.4 million. Management is optimistic on investments in shipping starting to pay off. Notably, shipping-related revenues contributed 49% to total revenues in the reported quarter.

Pitney Bowes Inc. Price, Consensus and EPS Surprise

 

Pitney Bowes Inc. Price, Consensus and EPS Surprise

Pitney Bowes Inc. price-consensus-eps-surprise-chart | Pitney Bowes Inc. Quote

 

Quarter in Detail

Global Ecommerce revenues surged 41% (up 40% after adjusting for currency) to $413 million, benefitting from strong growth across Domestic Parcel, Digital Delivery and Cross Border Services volumes.

Presort Services of $143 million were up 2% (up 2% after adjusting for currency) on a year-over-year basis driven by growth in Marketing Mail.

Sending Technology Solutions were down 1% year over year (down 3% after adjusting for currency) to $359 million. Sluggishness in support services, supplies and financing limited the upside.

SendTech shipping-related revenues were $30 million, growing at a low double-digit rate. Further, Pitney Bowes stated that the number of labels printed through its shipping offerings increased more than 40%, while paid subscriptions grew nearly 80%.

Adjusted EBITDA Details

In the first quarter, adjusted EBITDA declined 0.6% from the year-ago quarter’s figure to $89.3 million.

Segment EBITDA increased 10% from the year-ago quarter’s figure to $140.4 million. Segment EBIT jumped 15% from the year-ago quarter’s figure to $107.2 million.

Balance Sheet & Cash Flow

As of Mar 31, 2021, cash and cash equivalents and short-term investments were $696.93 million compared with $940 million as of Dec 31, 2020.

As of Mar 31, 2021, long-term debt (including current portion) was $2.44 billion compared with $2.56 billion as of Dec 31, 2020. The company also repaid debt worth $126 million in the quarter under review.

Cash flow generated was $65.9 million compared with $110.8 million of net cash generated in operations in the previous quarter. Free cash outflow was $1.24 million compared with free cash flow of $96.8 million in the prior quarter.

The company incurred expenses of $4 million under restructuring payments and capital expenditures worth $43 million in the reported quarter. Also, the company paid out $9 million in dividends in the quarter under review.

Guidance

For 2021, the company expects revenues to rally more than 2020 in the low-to-mid single digit range, marking it as the fifth consecutive year of growth (on constant currency basis). The company also expects adjusted earnings per share to grow on a year-over-year basis owing to strong performance of Global Ecommerce.

However, the company anticipates lower free cash flow due to specific items that helped 2020 performance and “are not expected to continue at the same level in 2021.”

Zacks Rank & Stocks to Consider

Currently, Pitney Bowes carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector worth consideration are Qorvo (QRVO - Free Report) , Vishay Intertechnology (VSH - Free Report) and Microchip (MCHP - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Vishay is set to report its quarterly results on May 4. Qorvo and Microchip are scheduled to report their quarterly results on May 5 and May 6, respectively.

Long-term earnings growth rate of Qorvo, Vishay Intertechnology and Microchip is pegged at 14%, 20.3% and 15.5%, respectively.

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