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Pitney Bowes Spinoff Pushed Back

The company says its Capital Services unit won't be separated till mid-2006.
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Pitney Bowes

(PBI) - Get Free Report

posted a third-quarter profit but said a scheduled spinoff would be held back by delays in completing the paperwork.

The Stamford, Conn., document management company made $144 million, or 62 cents a share, up from the year-ago $137 million, or 58 cents a share. Revenue rose 11% from a year ago to $1.36 billion. Latest-quarter earnings included a 4-cents-a-share restructuring charge. Excluding the charge, third-quarter numbers matched the Thomson First Call analyst consensus estimate.

"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," said CEO Michael Critelli. "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."

The company set the buyback of up to $300 million in stock. Pitney Bowes also said the cost of preparing the Capital Services unit for a planned spinoff caused earnings before interest and taxes at the unit to fall 26%. The company said preparing the paperwork has taken longer than expected, meaning that the spinoff won't take place till mid-2006.

For the fourth quarter, the company expects to post earnings of 64 cents to 73 cents a share on revenue growth of 5%-7%. Excluding restructuring charges, Pitney Bowes projects a fourth-quarter profit of 73-75 cents a share, in line with the Thomson First Call estimate.

Shares of Pitney Bowes fell 26 cents Monday to $41.43.