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Pitney Bowes (PBI) Q1 Earnings Miss Estimates, Down Y/Y
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Pitney Bowes Inc. (PBI - Free Report) reported first-quarter 2020 adjusted earnings of 5 cents per share, which missed the Zacks Consensus Estimate by 58.3%. Moreover, the figure declined 64.3% year over year.
The downside was caused by a negative impact of 5 cents due to increase in credit loss provisions to reflect current macro-environment conditions stemming from COVID-19 in connection with the application of the current expected credit losses (CECL) accounting standard on Jan 1, 2020.
Total revenues inched up 0.2% year over year to $796.3 million. Adjusting for foreign currency exchange and market exit impact, revenue growth was 1% year over year.
Notably, the company’s shares have declined 26.5% in the year-to-date period compared with the industry’s fall of 26.7%.
Pitney Bowes Inc. Price, Consensus and EPS Surprise
Commerce Services (54.4% of total revenues) increased 8% (up 8% after adjusted for currency) from the year-ago quarter’s figure to $433 million. Global E-commerce revenues rose 10% to $292 million, while Presort Services of $141 million inched up 4% up 4% year over year.
Global Ecommerce revenues benefited from strong growth in delivery and fulfillment services, offset by COVID-19 induced disruptions. Presort Services revenues improved on the back of increased volumes in first class mail. However, decline in marketing mail volumes due to COVID-19 limited growth.
Sending Technology Solutions (45.6% of revenues) declined 8% year over year (down 7% after adjusted for currency) to $363 million. The downside was caused by lower equipment sales and COVID-19 induced supply chain disruptions but was partially offset by higher business service revenue.
Operating Details
In the first quarter, adjusted EBITDA declined 12.7% from the year-ago quarter’s figure to $89.8 million.
Segment EBITDA declined 18% from the year-ago quarter’s figure to $127.7 million. Commerce Services EBITDA declined 49% from the year-ago quarter’s level to $12.1 million. Sending Technology Solutions EBITDA fell 12% year over year to $115.6 million.
Segment EBIT declined 24% from the year-ago quarter’s figure to $92.8 million.
Commerce Services EBIT came in at ($13.8 million) compared with $466K in the year-ago quarter. Global Ecommerce EBIT came in at ($29.5 million) compared with ($14.6 million) in the year-ago quarter, on account of costs associated with the opening of new facilities. However, Presort Services EBIT rose 4% to $15.7 million. Growth was partly offset by unrealized loss from certain investment securities
Sending Technology Solutions EBIT fell 13% year over year to $106.6 million due to the aforementioned increase in credit loss provisions.
Balance Sheet & Cash Flow
As of Mar 31, 2020, cash and cash equivalents (including short-term investments) were $730.3 million compared with $1.04 billion as of Dec 31, 2019.
Long-term debt (including current portion) was $2.63 billion, down from $2.74 billion reported at the end of the previous quarter.
Net cash used in operations was $66.3 million compared with $69.9 million of cash flow generated in the previous quarter. Free cash outflow came in at $47.4 million compared with free cash flow of $66.5 million in the prior quarter.
In the reported quarter, Pitney Bowes paid out dividends worth $9 million.
On May 4, Pitney Bowes’ board of directors announced a cash dividend of 5 cents per share, payable on Jun 8, to shareholders as on May 22.
The company incurred expenses of $6 million under restructuring payments and capital expenditures worth $26 million in the reported quarter.
Guidance
The company suspended guidance for 2020 due to uncertainties related to the COVID-19 outbreak as well as its negative impact on consumer demand and supply chains.
Zacks Rank & Stocks to Consider
Currently, Skyworks carries a Zacks Rank #3 (Hold).
Long-term earnings growth rate for Netlist and InterDigital is pegged at 15% each, while Pixelworks is pegged at 20%.
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Pitney Bowes (PBI) Q1 Earnings Miss Estimates, Down Y/Y
Pitney Bowes Inc. (PBI - Free Report) reported first-quarter 2020 adjusted earnings of 5 cents per share, which missed the Zacks Consensus Estimate by 58.3%. Moreover, the figure declined 64.3% year over year.
The downside was caused by a negative impact of 5 cents due to increase in credit loss provisions to reflect current macro-environment conditions stemming from COVID-19 in connection with the application of the current expected credit losses (CECL) accounting standard on Jan 1, 2020.
Total revenues inched up 0.2% year over year to $796.3 million. Adjusting for foreign currency exchange and market exit impact, revenue growth was 1% year over year.
Notably, the company’s shares have declined 26.5% in the year-to-date period compared with the industry’s fall of 26.7%.
Pitney Bowes Inc. Price, Consensus and EPS Surprise
Pitney Bowes Inc. price-consensus-eps-surprise-chart | Pitney Bowes Inc. Quote
Quarter in Detail
Commerce Services (54.4% of total revenues) increased 8% (up 8% after adjusted for currency) from the year-ago quarter’s figure to $433 million. Global E-commerce revenues rose 10% to $292 million, while Presort Services of $141 million inched up 4% up 4% year over year.
Global Ecommerce revenues benefited from strong growth in delivery and fulfillment services, offset by COVID-19 induced disruptions. Presort Services revenues improved on the back of increased volumes in first class mail. However, decline in marketing mail volumes due to COVID-19 limited growth.
Sending Technology Solutions (45.6% of revenues) declined 8% year over year (down 7% after adjusted for currency) to $363 million. The downside was caused by lower equipment sales and COVID-19 induced supply chain disruptions but was partially offset by higher business service revenue.
Operating Details
In the first quarter, adjusted EBITDA declined 12.7% from the year-ago quarter’s figure to $89.8 million.
Segment EBITDA declined 18% from the year-ago quarter’s figure to $127.7 million. Commerce Services EBITDA declined 49% from the year-ago quarter’s level to $12.1 million. Sending Technology Solutions EBITDA fell 12% year over year to $115.6 million.
Segment EBIT declined 24% from the year-ago quarter’s figure to $92.8 million.
Commerce Services EBIT came in at ($13.8 million) compared with $466K in the year-ago quarter. Global Ecommerce EBIT came in at ($29.5 million) compared with ($14.6 million) in the year-ago quarter, on account of costs associated with the opening of new facilities. However, Presort Services EBIT rose 4% to $15.7 million. Growth was partly offset by unrealized loss from certain investment securities
Sending Technology Solutions EBIT fell 13% year over year to $106.6 million due to the aforementioned increase in credit loss provisions.
Balance Sheet & Cash Flow
As of Mar 31, 2020, cash and cash equivalents (including short-term investments) were $730.3 million compared with $1.04 billion as of Dec 31, 2019.
Long-term debt (including current portion) was $2.63 billion, down from $2.74 billion reported at the end of the previous quarter.
Net cash used in operations was $66.3 million compared with $69.9 million of cash flow generated in the previous quarter. Free cash outflow came in at $47.4 million compared with free cash flow of $66.5 million in the prior quarter.
In the reported quarter, Pitney Bowes paid out dividends worth $9 million.
On May 4, Pitney Bowes’ board of directors announced a cash dividend of 5 cents per share, payable on Jun 8, to shareholders as on May 22.
The company incurred expenses of $6 million under restructuring payments and capital expenditures worth $26 million in the reported quarter.
Guidance
The company suspended guidance for 2020 due to uncertainties related to the COVID-19 outbreak as well as its negative impact on consumer demand and supply chains.
Zacks Rank & Stocks to Consider
Currently, Skyworks carries a Zacks Rank #3 (Hold).
Netlist, Inc. (NLST - Free Report) , Pixelworks, Inc. (PXLW - Free Report) and InterDigital, Inc. (IDCC - Free Report) are some better-ranked stocks worth considering in the broader computer and technology sector, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Netlist and InterDigital is pegged at 15% each, while Pixelworks is pegged at 20%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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