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 user 2007-11-19 at 11:43:00 am Views: 71
  • #21130

    Pitney Bowes to Cut 1,500 Jobs
    Conn. — Not without pain, Pitney Bowes Inc. is beginning the final leg
    on its race to all-digital and computer-networked equipment.

    Stamford-based mail and document-managing company announced Thursday it
    will take a charge of between $300 million and $400 million that
    include costs to write off inventory and leases of discontinued
    equipment. And it will cut 1,500 jobs, about 4 percent of its work
    force, as it outsources manufacturing work and streamlines management.

    Bowes, which began its shift to digital mailing technology in 2002, is
    reacting as much to changes in the U.S. Postal Service on which its
    business relies as to technological advances such as Internet mail
    tracking, Web-based postage sales and computer networks.”Our products
    can help postal operators enhance their operating efficiency, move
    lower value transactions away from the postal counter and support the
    increasing flexibility in pricing structures characteristic of postal
    reform and liberalization,” Murray Martin, president and chief
    executive, said in a conference call with analysts.The move is the
    latest for a company that traces its beginnings to 1901, when inventor
    Arthur Pitney developed a postage stamp machine, and seven years later
    when businessman Walter Bowes brought to post offices the first
    canceling machines.

    Pitney Bowes, which won post office approval
    for its postage meter in 1920 and introduced the first mass-market
    postage meter in 1949, must now provide computerized metering and
    adjust to new postal rules that became law last year. Under new
    regulations, the post office must keep its rate increases at or less
    than the rate of inflation for first-class and standard mail and
    periodicals but will have greater flexibility in setting rates for
    parcels and Priority and Express mail.For Pitney Bowes, that means
    customers must have access to sufficient computer memory to accommodate
    rate changes and the ability to download software rather than wait for
    a service technician.”Our progress toward greater memory and greater
    capacity for digital devices has been a journey,” said Kevin Weiss,
    executive vice president and president of Pitney Bowes’ global
    mailstream solutions. “It’s not been an event by any stretch of the

    Shares of Pitney Bowes rose 16 cents to $38 Thursday.
    company also announced that it expects results between a loss of 17
    cents and a profit of 4 cents per share for the fourth quarter and a
    profit of $1.76 to $1.97 for the year. In October, Pitney Bowes
    forecast net income of 66 cents to 70 cents per share.Excluding
    extraordinary items, the company said it still expects to earn 67 cents
    to 71 cents per share for the fourth quarter. Analysts expected a
    profit of 69 cents a share, according to a survey by Thomson
    Financial.Martin, without being specific, also said Pitney Bowes will
    consider alternatives to its U.S. management services business. The
    business, which brings in about $1 billion in annual revenue and
    employs 12,000 workers, provides mailroom and copy center services to
    large corporations, federal agencies and law firms.Matthew Troy, an
    analyst at Citigroup, said in an investor note that the management
    services business “remains a drag.” He said Pitney Bowes is “moving
    definitively to drive structural change with greater clarity” by
    mid-2008.The company’s announcement was a “solid first step for Pitney
    Bowes in rebuilding sentiment across a wider investor base in 2008,”
    Troy said.Analyst Shannon Cross of Cross Research said she expected
    some action by Pitney Bowes following disappointing third-quarter
    earnings last month. The company’s $127.6 million in profits was down
    about 16.5 percent, from $148.6 million in the same quarter last year.
    Per-share earnings sunk to 58 cents, from 67 cents in the third quarter
    of 2006.”In light of the weakening of the economic situation and
    uncertainty on the postal side, I’m not surprised to hear this,” Cross
    said.Investors have seen the mailing industry as resistant to
    recessions, but that changed with the third-quarter earnings, she said.