NORTH CANTON, Ohio (AP) ¿ Automated teller machines maker Diebold Inc. reported a sharp decline Tuesday in first-quarter earnings as it recorded a hefty charge related to a proposed settlement with federal regulators. It also plans to cut about 300 jobs, or about 1.7 percent of its work force. While Diebold's adjusted results topped Wall Street expectations, the company also cut its full-year forecast, citing declining orders. Its shares fell $1.14, or 4.2 percent, to close at $25.85 Tuesday after falling as low as $22.76 earlier in the session. Net income tumbled 88 percent to $1.6 million, or 2 cents per share, for the three months ended March 31 compared with $13.8 million, or 21 cents per share, a year earlier. Results included a $25 million charge for a deal Diebold reached with the Securities and Exchange Commission to settle civil charges related to a pending enforcement inquiry. The proposed settlement still needs final SEC approval. Excluding the SEC charge and other items, earnings from continuing operations were 39 cents per share.
Analysts expected profit of 17 cents per share, according to a Thomson Reuters survey. Analysts' estimates typically exclude one-time items. Sales dipped 4 percent to $663.2 million from $691.9 million as both product and service revenue declined. Analysts were looking for lower revenue of $637.5 million. Diebold makes self-service banking devices, security systems and electronic voting machines. It said order softness in Eastern Europe, Russia and parts of the U.S. prompted it to lower its 2009 profit and revenue outlooks. "As the quarter progressed, the earlier weakness in orders that we had experienced in Eastern Europe, Russia and the regional bank segment of the United States became more precipitous," said Thomas W. Swidarski, president and chief executive officer. The company now expects a 2009 adjusted profit of $1.70 to $2 per share. It previously predicted net income of $2.10 to $2.40 per share. Revenue is anticipated to drop 6 percent to 13 percent. The company's prior outlook was for a 2 percent to 10 percent decline.
Analysts predict full-year net income of $2.17 per share on revenue of $3.05 billion. Swidarski said the company would accelerate its cost-cutting moves, including eliminating 300 positions, some through attrition. In its announcement Monday on the agreement with regulators, Diebold said it had been informed that federal prosecutors in Cleveland will not bring criminal charges against the company over transactions and accounting issues covered in an SEC probe. Regulators began reviewing the way Diebold reports revenue in early 2007, looking into when revenue could be reported for services and product shipments. U.S. Attorney Bill Edwards confirmed the decision Tuesday and said there would be no comment. Diebold has more than 17,000 employees and does business in more than 90 countries. ___ On the Net: http://diebold.com