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Tuesday, November 03, 2009

Diebold Shares Slump On Soft 3Q Earnings

By Ken Sweet

FOXBusiness

Diebold (DBD), the manufacturer of ATMs, posted a third-quarter loss on Tuesday as the company sold its money-losing and controversial voting machine division.

The company said it lost $7.2 million, or 11 cents a share, compared with a profit of $46.5 million, or 70 cents a share, from a year ago. Revenue dropped 26% to $645.2 million.

The quarter’s results included a $31.4 million after-tax loss on its sale of Premier Election Solutions to Election Systems & Software for $5 million in September. The voting machine division, which never made money for Diebold, was considered controversial because Diebold’s CEO was also a public supporter and fundraiser for then-President George W. Bush during the 2004 election.

Excluding the loss, Diebold said it made 39 cents a share, down from $1.18 a share, missing analysts’ estimates on both EPS and revenue.

Diebold’s primary business, making automated teller machines, saw revenues drop by 21% during the quarter from a year ago, to $485.3 million. As the financial crisis has shut down dozens of banks around the country, there has been little demand for the building of self-service cash machines.

The company’s security division, which includes home alarm systems, reported a 21% drop in revenue, as well, to $643.7 million as fewer homes were being built and consumers cut back on installing expensive security systems.

Shares of Diebold were down 5% in Tuesday trading to $28.59. The stock is basically unchanged year to date, compared with an 11.3% gain in the Dow Jones Industrial Average.

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