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Pitney Bowes (PBI) Announces Redemption of Senior Notes

Zacks Equity Research
Comtech Telecommunications (CMTL) closed the most recent trading day at $26.47, moving +1.26% from the previous trading session.

Pitney Bowes Inc. PBI will redeem all of its outstanding 6.25% senior notes due 2019 on Aug 2, 2018. Per the company, the 2019 notes will be redeemed at a price that is 100% of the principal amount of the notes to be redeemed plus accrued interest.

The inflow would increase cash and cash equivalents in Pitney Bowes’ balance sheet. This proves that the company remains focused on its goal of achieving positive cash generation.

The said notes were issued on Feb 14, 2005, under an agreement between the company and The Bank of New York Mellon, successor to Citibank, N.A.

Pitney Bowesended the first quarter of fiscal 2018 with $775.5 million in cash and cash equivalents versus $1.06 billion in the previous quarter. Cash flow from operations was $83 million, while free cash flow was $65 million.

Other Activities

The companyrecently completed the deal with Platinum Equity to divest its Document Messaging Technologies (“DMT”) production mail and supporting software business.

The company expects to utilize the proceeds to finance growth initiatives andrepay debts.

Last Words

The Global Ecommerce business continues to be one of the strongest growth drivers of the company. In less than five years, Global Ecommerce has grown from $20 million business to a worth of over $400 million. Going forward, the company anticipates this segment’s growth rate to accelerate, in light of expansion in overall retail volumes and customer wins.

Further, the company’s committed lookout for strategic acquisitions, like building channel partnerships with systems integrators and other technology companies, is likely to reinforce competitive position in the software business.

Zacks Rank & Key Picks

The stock carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include NVIDIA Corporation NVDA, Microchip Technology Incorporated MCHP and NetApp, Inc. NTAP, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA, Microchip and NetApp have a long-term expected EPS growth rate of 10.3%, 14% and 13.8%, respectively.

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