Pitney Bowes Sees Earnings Dip in Q3

Pitney Bowes Inc., Stamford, Conn., reported financial results for the third quarter 2013.

HIGHLIGHTS

Results for the quarter:

• Revenue of $939 million, which is a decline of 1 percent versus the prior year.
• Digital Commerce Solutions revenue grew 9 percent on a reported basis and 10 percent on a constant currency basis.
• Adjusted EPS from continuing operations of $0.49 per share.
• GAAP EPS from continuing operations of $0.38 per share; GAAP net loss of $0.03 per share.
• Free cash flow of $208 million for the quarter and $440 million year-to-date.
• GAAP cash from operations of $215 million for the quarter and $494 million year-to-date.
• Adjusted EBIT grew by 3.4 percent and EBIT margin improved by 0.8 percent versus prior year.
• Established revised segment reporting.
• Company reaffirms revenue and cash flow guidance; updates GAAP EPS from continuing operations and Adjusted EPS guidance.

Announcements:

• Sale of North America Management Services business completed.
• Sale of Nordic furniture business completed.
• Company announced intent to redeem in November, $300 million of bonds scheduled to mature in 2014.
• Signed agreement to purchase joint-venture partner’s minority interest in Brazilian business.
• Signed agreement to sell World Headquarters building.

“Our results reflect the aggressive actions we have taken, which are in line with our long-term strategy to deliver greater value for shareholders and clients,” said Marc Lautenbach, president and chief executive officer. “We experienced higher growth in our Digital Commerce Solutions segment and continue to implement a phased roll-out of our new go-to-market model in North America that will enhance the selling capabilities of our Mailing business. We also exited a non-core furniture business in Norway, and will gain 100 percent ownership in our Brazilian subsidiary operations. Improving margins across the portfolio demonstrate our continued commitment to improving operational efficiency. We continued to use a portion of the savings generated from our reduced operating costs to invest in positioning our digital commerce solutions for growth. We also recently announced an early debt retirement, using the proceeds of the North America Management Services sale, to further strengthen our balance sheet.”

THIRD QUARTER 2013 RESULTS

Revenue for the quarter, excluding discontinued operations of the Nordic furniture business, was $939 million, which was a decline of 1 percent when compared to the prior year. This was similar to second quarter results despite a very strong second quarter comparison in Production Mail. Revenue for the quarter grew 9 percent in the Digital Commerce Solutions segment, was slightly positive in the Enterprise Business Solutions group and declined 4 percent in the Small and Medium Business Solutions group.

Adjusted earnings per diluted share from continuing operations for the quarter were $0.49 per share, which includes a $0.06 per share tax benefit primarily associated with an affiliate reorganization.

Earnings per diluted share from continuing operations, on a Generally Accepted Accounting Principles (GAAP) basis, were $0.38 per share, which includes a non-cash asset impairment charge of $0.08 per share related to the signed agreement to sell the Company’s headquarters building and a restructuring charge of $0.03 per share. Including the net loss in discontinued operations of $0.40 per share, primarily related to taxes on the sale of the North America Management Services business, there was a net loss of $0.03 per share on a GAAP basis.

The full release is available on the company's website.