Pitney Bowes Inc. (PBI) reported fourth-quarter 2014 adjusted earnings per share from continuing operations of 51 cents, which came in line with both the Zacks Consensus Estimate as well as the year-ago quarter figure.
Profits during the quarter were driven by strength in the Digital Commerce Solution business. For full-year 2014, adjusted earnings per share from continuing operations came in at $1.90, which was higher than the prior-year figure of $1.81.
Inside the Headlines
Total revenue for the quarter was $984 million, down 3% from year over year, on a reported basis. The top line primarily benefited from strong performance of the Digital Commerce Solutions segment, largely offset by weakness in Small and Medium Business (SMB) Solutions and Enterprise Business Solutions segments.
For full year 2014, revenues increased 1% year over year to $3.8 billion, on a reported basis.
As per the segment groups, in fourth quarter 2014, SMB Solutions group’s revenue slipped 7% year over year to $510 million and Enterprise Business Solutions segment revenues dipped 4% year over year to $249 million. Nevertheless, Pitney Bowes’ Digital Commerce Solutions segment again performed well, with a 12% year-over-year increase in revenues to $225 million.
Income from continuing operations was $96.7 million in the quarter, compared with $105.7 million in the prior-year quarter. Meanwhile, free cash flow for the quarter stood at $154 million. The company disbursed $38 million for dividends.
Liquidity
Exiting the year, the company’s cash and cash equivalents totaled $1,079 million, up from $907.8 million as of Dec 31, 2013. Long-term debt decreased to $2,927 million as of Dec 31, 2014 from $3,346 million as of Dec 31, 2013. Shareholders’ equity was $77.3 million compared with the prior-year figure of $205.2 million.
2015 Outlook
Pitney Bowes expects its GAAP earnings per share from continuing operations to be in the range of $1.85 – $2.00. The Zacks Consensus Estimate for the same, which stands at $1.90, lies within this range.
Our Take
Although Pitney Bowes earnings came in line with the Zacks Consensus Estimate, its Enterprise Business Solutions group and SMB solutions segments continue to remain a concern for its financials. Nevertheless, the Digital Commerce Solutions segment performance helped tide over.
Pitney Bowes currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Danaher Corp. (DHR), Federal Signal Corp. (FSS) and Keppel Corporation Ltd. (KPELY). All stocks carry a Zacks Rank #2 (Buy).
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