Why Pitney Bowes (PBI) Is Jumping Today

NEW YORK (TheStreet) -- Pitney Bowes (PBI) jumped 14.7% to $24.93 Thursday after its earnings report beat analyst earnings estimates.

In its fourth-quarter report Pitney Bowes posted earnings of 52 cents a share, beating the Capital IQ Consensus Estimate of 44 cents a share by 8 cents. Revenue for the business equipment producer rose 1.6% year-over-year to $1.03 billion, which is in-line with analyst estimates of $1.04 billion.

Pitney Bowes also issued inline guidance for 2014 that sees earnings of between $1.75 and $1.90 a share. Analysts estimate earnings of $1.80 a share for the year. The guidance sees revenue of between $3.83 billion and $3.94 billion, compared to analyst estimates of $3.89 billion for the year.

TheStreet Ratings team rates PITNEY BOWES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate PITNEY BOWES INC (PBI) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, PBI's share price has jumped by 86.65%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PBI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, PITNEY BOWES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 208.82% to $214.53 million when compared to the same quarter last year. In addition, PITNEY BOWES INC has also vastly surpassed the industry average cash flow growth rate of -11.32%.
  • The gross profit margin for PITNEY BOWES INC is rather high; currently it is at 64.72%. Regardless of PBI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.58% trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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