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Pitney Bowes (PBI) Down 0.9% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Pitney Bowes (PBI). Shares have lost about 0.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Pitney Bowes due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Pitney Bowes Q2 Earnings Beat Estimates, Revenue Up Y/Y

Pitney Bowes reported second-quarter 2021 adjusted earnings of 12 cents per share, which beat the Zacks Consensus Estimate by 140%. The company reported break-even in the year-ago quarter.  

Revenues increased 7.4% year over year to $899.2 million. Adjusting for foreign currency exchange, revenues increased 6% year over year.

Global Ecommerce revenues increased 5% (up 3% after adjusting for currency) to $418 million. Presort Services of $135 million were up 14% (up 14% after adjusting for currency) on a year-over-year basis. Sending Technology Solutions were up 8% year over year (up 6% after adjusting for currency) to $346 million.

In the second quarter, adjusted EBITDA increased 7.1% year over year to $95.9 million. Segment EBITDA increased 10% year over year to $286.2 million.

Segment EBIT jumped 15% from the year-ago quarter’s figure to $219.6 million.

Balance Sheet & Cash Flow

As of Jun 30, 2021, cash and cash equivalents and short-term investments were $814.3 million compared with $697 million as of Mar 31, 2021.

As of Jun 30, 2021, total debt (including current portion) was $2.43 billion compared with $2.44 billion as of Mar 31, 2021.

Cash flow generated was $78.8 million compared with $65.9 million of net cash generated in operations in the previous quarter. Free cash flow was $86.7 million compared with free cash outflow of $1.24 million in the prior quarter.

Guidance

For 2021, Pitney expects revenues to grow in the low-to-mid single digit range. The company also expects adjusted earnings per share to grow on a year-over-year basis owing to strong performance of Global Ecommerce.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Pitney Bowes has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Pitney Bowes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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