NEW YORK (TheStreet) -- Shares of Pitney Bowes (PBI) are up 4.94% to $25.28 on heavy trading volume after CEO Marc Lautenbach said he expects flat or reduced employment levels next year as the mail and document-services company cuts costs further as it adapts to the digital era, the Wall Street Journal reports.
Expenses between May 2013 and September 30, 2014, have come down by $110 million, Lautenbach told the Journal.
The company hopes to save another $125 million between May 2014 and the end of 2017 with some of those savings coming from lower labor costs and productivity improvements, he said.
R&D outlays are "going up faster than our revenue," Lautenbach added. Overall revenue was down slightly last year, and Pitney Bowes has predicted a revenue increase this year of between 1% and 3%, the Journal said.
About 5.65 million shares of Pitney Bowes changed hands by 3:22 p.m. in New York, compared to the average of 1.59 million.
Separately, 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 multiple strengths, 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 compelling growth in net income, revenue growth, increase in stock price during the past year, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 2493.5% when compared to the same quarter one year prior, rising from -$5.53 million to $132.29 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 2.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- PITNEY BOWES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PITNEY BOWES INC reported lower earnings of $1.43 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($1.91 versus $1.43).
- The gross profit margin for PITNEY BOWES INC is rather high; currently it is at 62.59%. 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, PBI's net profit margin of 14.04% compares favorably to the industry average.
- You can view the full analysis from the report here: PBI Ratings Report