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Pitney Bowes (PBI) Lags on Q2 Earnings, Tweaks Guidance

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Pitney Bowes Inc. (PBI - Free Report) is one of the largest providers of mail processing equipment and integrated mail solutions across the world. It offers a full suite of equipment, supplies, software and services for end-to-end mainstream solutions, which enables its customers to optimize the flow of physical and electronic mail, documents and packages across their operations.

Pitney Bowes’ concerted efforts to transform its business over the past four years are finally beginning to show results. Last quarter, the company’s Software business, which has been long hurting from macro woes, finally returned to growth. This trend might likely continue for upcoming quarters. Over the past few quarters, the company’s Digital Commerce Solutions (“DCS”) has acted as a major profit churner, driving top-line performance.

However, on the flip side, prolonged softness in the mailing business is likely to prove detrimental to Pitney-Bowes’ growth momentum to some extent. Lower recurring supplies revenues are expected to hurt the mailing business, going forward. In addition, escalating marketing expenses in relation to the ERP implementation program is likely to act as an overhang.

In the last four trailing quarters, PBI has missed earnings estimates thrice resulting in an average negative surprise of 4.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Currently, PBI has a Zacks Rank #3 (Hold) but that could change following its second-quarter 2017 earnings report which has just released.

We have highlighted some of the key details from the just-released announcement below.

Earnings: For the second-quarter 2017 the company reported adjusted earnings per share of 33 cents, which missed the Zacks Consensus Estimate of 36 cents.

Pitney Bowes Inc. Price and EPS Surprise

 

Pitney Bowes Inc. Price and EPS Surprise | Pitney Bowes Inc. Quote

Revenues: Revenues came in at $821.0 million, down 1.7% year over year.

Key Stats: During the second quarter of 2017, the company paid $35 million in dividends and used $7 million in restructuring payments. Further it tweaked its full-year 2017 guidance. Currently, it expects 2017 adjusted earnings per share to lie in the range $1.70-$1.78, compared to the earlier guided range of $1.70–$1.85. Revenues, on a reported basis, are expected to see flat to 1% growth year over year compared with the previous guidance of 2% decline to 1% growth.

Stock Price: PBI shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.

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