Pitney Bowes Reports Slightly Lower 2010 Revenue but Remains Positive on Future

This guidance discusses future results, which are inherently subject to unforeseen risks and developments. As such, discussions about the business outlook should be read in the context of an uncertain future, as well as the risk factors identified in the safe harbor language at the end of this release.

The company expects 2011 revenue, excluding the impacts of currency, to be in a range of a flat to 3 percent growth. The company’s outlook projects a return to revenue growth due in part to a number of initiatives designed to stabilize its base business and drive new growth opportunities. This is occurring in a business and economic environment characterized by gradual improvement at varying rates by sector and geography.

The company anticipates continued improvement in equipment sales in 2011 building on two consecutive quarters of year-over-year improvement, as well as an expected positive outlook for sales of new solutions like the Connect+ communications system. As equipment sales improve, the company expects moderating declines in recurring revenue streams primarily related to the SMB Solutions Group. The company has previously discussed that lower equipment sales during the economic downturn affects financing, rentals and supplies revenue streams. The company expects growth in several areas in 2011 to offset the anticipated declines in SMB stream revenues. These include growth in Software revenue due to increasing demand for term-based licenses of customer communications management software solutions; expansion in Mail Services; and new customer communications management solutions across our enterprise business portfolio.

In 2011, the company anticipates generating incremental earnings of $0.32 to $0.42 per share from operations growth and productivity, excluding the impact of SMB stream revenues. As noted previously, the company anticipates lower SMB stream revenues as a result of lower equipment sales in prior periods, which are expected to negatively impact earnings by $0.25 to $0.30 per share, resulting in comparative earnings for the year of $2.25 to $2.40 per share. The company also plans to invest $.05 to $.10 per share to develop the market for Volly, a secure digital mail system. As a result, the company expects 2011 adjusted earnings per share from continuing operations in the range of $2.15 to $2.35.