Pitney Bowes (PBI) Q3 Earnings Miss, Revenues Down Y/Y

Pitney Bowes Inc. PBI 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’ steady transformation process over the past three years to create long-term flexibility for investment reinstates hope. In this regard, the company’s decision to exit low-margin countries like Mexico, South Africa and five markets in Asia looks encouraging. The company’s Digital Commerce Solutions (“DCS”) remains one of its major strengths and has been driving the company’s performance over the past few quarters.

However, an uncertain global economic environment has proved to be a significant drag on the company’s top-line performance for the past few quarters. Moreover, rising operating and marketing expenses is also adding to the company’s woes. While the previously planned ERP implementation in the U.S. is expected to raise operating expenses, aggressive advertising and marketing strategies are likely to increase marketing expenses. These rising expenditure are likely to pressurize the company’s financials in the short-run.

In the last four trailing quarters, PBI has missed earnings estimates thrice resulting in an average negative surprise of 8.2%.

Currently, PBI has a Zacks Rank #4 (Sell) but that could change following its third-quarter 2016 earnings report which has just released. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

Earnings: For the third-quarter 2016 the company reported adjusted earnings per share of 44 cents which missed the Zacks Consensus Estimate of 47 cents.

Revenues: Revenues came in at $839 million, which decreased 3.5% on a constant currency basis year over year.

Key Stats: During the third quarter of 2016, the company paid $35 million in dividends and used $25 million for the acquisition of geospatial and demographic data provider Maponics.

Stock Price: Shares prices did not show any movement in the pre-market trading session.

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