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Pitney Bowes' Parcel Sortation Solutions Find Takers in India

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Leading global eCommerce solutions provider, Pitney Bowes Inc. (PBI - Free Report) recently gained two new clients – Gati Limited and Flipkart – fortifying its emerging parcel sortation business in India. Pitney Bowes’ TrueSort automated parcel sorting system and OneSort automated data capture system have been deployed by Gati Limited and Flipkart, respectively, to modernize their parcel shipments.

Gati is one of India’s leading express distribution and supply chain solutions provider, with a solid footprint in the Asia-Pacific region. Pitney Bowes joined forces with intralogistics automation integrator – Armstrong – to deploy TrueSort automated parcel sorting solution at Gati-KWE. TrueSort runs on Pitney Bowes’ proprietary Business Logic Processing software and can be optimized based on the size, type and volume of parcels being managed. 

Similarly, Flipkart – India’s largest ecommerce marketplace – opted for Pitney Bowes OneSort system. Touted as an “all-in-one data capture solution”, OneSort system can process instructions for labeling, routing, postal documentation, client billing and custom reporting. It is a well suited solution for mailrooms, warehouses and shipping centers trying to develop parcel management efficiency.

Meanwhile, Pitney Bowes remains confident that thriving parcel volumes in India will offer lucrative opportunities to expand its business. In 2015, parcel volumes in India rose by 8.2% to 340 million parcels in 2015. The third annual survey from Pitney Bowes Global Online Shopping Survey reveals that increasing number of people have been spending long hours for online shopping.

Online vendors in India are expected to work on improving their parcel shipping solutions to improve customer satisfaction. This offers ample opportunities for Pitney Bowes. On a global scale, findings of Pitney Bowes Parcel Shipping Index suggest that parcel volumes are projected to grow by 20% by 2018. The company is well equipped to benefit from this trend.

Despite the company’s sturdy shipping portfolio, deteriorating market conditions in the technology industry and the lack of execution of some strategic business decisions have been affecting the company’s business. In fact, over the past six months, shares of the company recorded an average negative return of 27.9%, significantly wider than the Zacks categorized Office Automation & Equipment industry’s decline of 1.2%.

Further, Pitney Bowes has been experiencing a surge in its operating expenses on account of ERP implementation in the U.S., and higher marketing expenses in relation to aggressive advertising and marketing strategies. Other pressing concerns include currency fluctuations, sluggish end markets and prolonged softness in software and mailing businesses. We believe with strong headwinds at play, the Zacks Rank #4 (Sell) company is unlikely to stage a comeback anytime soon.

Stocks to Consider

Better-ranked stocks in the broader computer & technology sector include Applied Optoelectronics, Inc. (AAOI - Free Report) , Barracuda Networks, Inc. (CUDA - Free Report) and Guidance Software, Inc. . While Applied Optoelectronics sports a Zacks Rank #1 (Strong Buy), Barracuda Networks and Guidance Software carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Optoelectronics, Inc. has a whopping average earnings beat of 116.5%, led by three beats in the trailing four quarters.

Barracuda Networks company has a striking earnings surprise history. It has surpassed estimates strongly in each of the trailing four quarters, with an extraordinary average positive surprise of 475%.

Guidance Software also has an impressive earnings history. The company has beaten estimates in each of the four trailing quarters, with an average surprise of 35.8%.

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