Why Shares of Pitney Bowes Inc. Tumbled Today
Image source: Pitney Bowes.
What happened
Shares of Pitney Bowes (NYSE: PBI) slumped on Tuesday following the company's third-quarter report. The supplier of mailing and shipping solutions suffered a revenue decline, missed analyst estimates across the board, and gave a disappointing update on full-year guidance. At 11:15 a.m. EDT, the stock was down about 17%.
So what
Pitney Bowes reported third-quarter revenue of $839 million, down 4% year over year and about $13 million below the average analyst estimate. Revenue from digital commerce solutions declined by 1%, with strong growth in e-commerce marketplace and retail wiped out by weakness in software solutions and office shipping.
Solutions for small and medium businesses saw a 7% slump in revenue, while enterprise business solutions grew revenue by 1%. Within the enterprise solutions segment, production mail produced a 5% revenue increase, while presort services revenue fell by 2%.
Non-GAAP earnings per share (EPS) came in at $0.44, up from $0.43 during the prior-year period but $0.02 below analyst expectations. GAAP EPS was $0.35, down from $0.44, with restructuring and other one-time costs responsible for the drop.
CEO Marc Lautenbach was upbeat about Pitney Bowes' progress:
Now what
Pitney Bowes now expects to be at the low end of its previously announced annual guidance range for revenue and non-GAAP EPS. The company expects revenue to decline on a constant currency basis by 1% to 3% and for non-GAAP EPS to come in between $1.75 and $1.82. The company produced non-GAAP EPS of $1.75 in 2015.
While Pitney Bowes has been able to maintain its profitability amid slumping revenue, investors punished the stock for coming up short of expectations. Shares have been moving lower since mid-2014, and Tuesday's decline continues that trend.
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