*NEWS*PITNEY BOWES:STRONG Q3 GROWTH

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*NEWS*PITNEY BOWES:STRONG Q3 GROWTH

 user 2005-11-02 at 9:53:00 am Views: 61
  • #14475

    Pitney Bowes Announces Strong Revenue Growth in Q3
    STAMFORD,
    Conn., NOV 05– Pitney Bowes  Inc. today reported third quarter
    performance characterized by strong growth in revenue, earnings before
    interest and taxes , and earnings per share. Revenue increased 11
    percent to $1.36 billion. EBIT rose 12 percent to $272 million versus
    the third quarter of 2004. Net income for the quarter increased six
    percent to $144 million or $.62 per diluted share versus $.58 per
    diluted share in the prior year. Excluding the impact of restructuring
    charges, the company’s third quarter adjusted diluted earnings per
    share was $.66 versus $.63 in the third quarter of 2004.
    Commenting
    on the company’s financial performance during the quarter, Chairman and
    CEO Michael J. Critelli noted, “We are pleased with our broad- based
    growth in equipment, software, supplies, financing, and services
    revenue during the quarter. This reflects our success in executing our
    strategies for expanded offerings throughout the mailstream.
    “We are
    also pleased that we were able to grow our earnings per share despite
    an increase in interest expense, a higher tax rate, and a reduced
    earnings contribution from Capital Services compared with the third
    quarter of the prior year.”
    During the quarter, the company took
    several actions as part of its previously announced restructuring
    program and recorded after-tax charges of $8 million or $.04 per
    diluted share.
    The company generated $218 million in cash from
    operations during the quarter. Free cash flow was $165 million. Free
    cash flow is equal to cash from operations less capital expenditures
    and excludes the effects of the company’s restructuring program.
    The
    company purchased approximately one million of its common shares during
    the quarter for $41 million. The Board of Directors approved an
    additional $300 million authorization for the repurchase of shares over
    the next twelve to twenty-four months. The company now has $310 million
    of remaining authorization for future share repurchases.
    Global
    Mailstream Solutions includes worldwide revenue and related expenses
    from the sale, rental, and financing of mail finishing, mail creation,
    shipping, and production mail equipment; supplies; support services;
    payment solutions; and mailing and customer communication software.
    During
    the quarter Global Mailstream Solutions revenue and EBIT increased nine
    percent to $949 million and $286 million, respectively, when compared
    with the third quarter in the prior year.
    In the U.S., the quarter’s
    revenue growth was favorably impacted by placements of networked
    digital mailing systems (especially small and mid- sized systems), mail
    creation equipment, and supplies. The quarter’s results also included
    26 percent revenue growth from Document Messaging Technologies, driven
    by growth from Group 1 software and placements of the industry-leading
    Advanced Productivity Systems (APS) and Flexible Productivity Systems
    (FPS).
    Outside of the U.S., revenue grew 13 percent. These results
    include increased placements of mailing equipment with small businesses
    and increased sales of supplies in Europe. In addition, revenue growth
    benefited from the fourth-quarter 2004 acquisition of Groupe Mag and
    favorable foreign currency translation. Revenue growth for the quarter
    was adversely impacted by the timing of production mail placements in
    Europe.
    Global Business Services includes worldwide revenue and
    related expenses from facilities management contracts, reprographics,
    document management, and other value-added services to key vertical
    markets; and mail services operations, which include presort mail
    services, international outbound mail services, and direct mail
    marketing services.
    For the quarter, Global Business Services
    reported revenue growth of 19 percent to $376 million and EBIT growth
    of 66 percent to $26 million compared with the third quarter of the
    prior year.
    The company’s management services operation reported a
    two percent decline in revenue and an EBIT margin improvement to seven
    percent. This reflects the company’s focus on enhancing profitability
    for this business.
    Mail services revenue grew 129 percent versus the
    third quarter last year as a result of the expansion of its network,
    growth in customer base, and the acquisition of Imagitas during the
    second quarter 2005. EBIT margins were seven percent, which was an
    improvement versus last year’s third quarter even as the company
    continued to invest in the growth of its presort and international mail
    network and integrated recently acquired sites. Imagitas expanded its
    marketing services for the motor vehicle registration process to a
    fifth state and launched a catalog request form as an expanded offering
    in its move update kit.
    Capital Services revenue for the quarter
    increased three percent to $31 million and EBIT declined 26 percent to
    $16 million primarily as a result of the costs associated with the
    planned spin-off of this business.
    Earlier in the year, the company
    announced that it had entered into a definitive agreement to effect a
    sponsored spin-off of most of the Capital Services assets, which
    contributed approximately $.03 per diluted share in the third quarter
    2005, about one cent less than the contribution to earnings in the
    third quarter of the prior year. Subject to customary regulatory
    approvals, the new entity will be an independent, publicly traded
    company consisting of most of the assets in the Capital Services
    segment. The preparation of the regulatory filings with respect to the
    new company has taken longer than anticipated. Consequently, the
    company now expects the spin-off to occur mid-year 2006.
    The
    anticipated net after-tax restructuring charges for the fourth quarter
    are in the range of $5 million to $20 million, or $.02 to $.09 per
    diluted share. The restructuring charges relate to the continued
    realignment and streamlining of the company’s worldwide infrastructure
    requirements.
    The company anticipates fourth quarter revenue growth
    in the range of five to seven percent and diluted earnings per share in
    the range of $.64 to $.73. Excluding the impact of restructuring
    charges, the company expects adjusted diluted earnings per share in the
    range of $.73 to $.75.