Pitney Bowes Earnings Fall Short of Analysts' Forecasts

Updated from 8:46 a.m. ET

Earnings Scorecard
Actual	Estimated*	Year-Ago
$0.55	$0.62	$0.57

Pitney Bowes (PBI), the postal people who make all sorts of mail-related machinery, announced fourth-quarter earnings of 55 cents a share, whiffing the 62-cent analysts' consensus estimate compiled by First Call/Thomson Financial. The number also falls short of year-ago earnings of 57 cents a share.

The firm also warned of lower results for the first quarter and all of 2001. It now expects first quarter earnings per share to come in between 52 cents and 53 cents, much lower than its previous 60-cent estimate. It also pared its full-year estimate to $2.35 to $2.37 a share, also lower than the $2.69 estimate.

The company said it plans to restructure and streamline its processes in order to trim costs, resulting in a $100 million charge, to be taken mostly in the first quarter of 2001, and the elimination of 700 to 800 jobs, or about 3% of its non-sales workforce. The company also upped its annual dividend to $1.16 a share from $1.14 and authorized a $300 million stock buyback. Just last month, Pitney Bowes announced it would spin off its office equipment unit, cutting out a slow-growing part of the business.

Wall Street was somewhat prepared for the miss, since Pitney Bowes warned in December that its fourth-quarter earnings would come in between 53 cents and 55 cents a share. Analysts' estimates remained higher, on average, but company spokesman Dan Burns said those higher estimates "do not reflect what Wall Street knew."

"We came in line with the guidance we gave Wall Street on Dec. 11," he added.

Yesterday, UBS Warburg raised the company to buy from hold, arguing that it usually does well coming out of an economic slowdown, and the earnings picture wouldn't get any uglier than it was in the fourth-quarter.

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