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Pitney Bowes (PBI) Q2 Earnings Top Estimates, Revenues Up Y/Y

Zacks Equity Research
·3 mins read

Pitney Bowes Inc. PBI reported second-quarter 2020 adjusted earnings of 4 cents per share, beating the Zacks Consensus Estimate by 100%. Nevertheless, the figure declined 78.9% year over year.

Total revenues improved 6% year over year to $837.5 million. Adjusting for foreign currency exchange and market exit impact, revenue growth was 7% year over year.

Quarter in Detail

Commerce Services increased 26% (up 26% after adjusted for currency) from the year-ago quarter’s figure to $516.6 million. Global Ecommerce revenues rose 41% to $398.5 million, while Presort Services of $118.1 million declined 8% year over year.

Global Ecommerce revenues benefited from strong growth in Domestic Parcel Delivery services and Digital Delivery volumes. Presort Services revenues declined due to sluggishness in marketing Mail and First Class volumes. However, Mail Flats and Bound Printed Matter volumes grew year over year and limited the decline.
 

Pitney Bowes Inc. Price, Consensus and EPS Surprise

Pitney Bowes Inc. Price, Consensus and EPS Surprise
Pitney Bowes Inc. Price, Consensus and EPS Surprise

Pitney Bowes Inc. price-consensus-eps-surprise-chart | Pitney Bowes Inc. Quote

Sending Technology Solutions declined 15% year over year (down 15% after adjusted for currency) to $320.9 million. The downside was caused by COVID-19 induced supply chain disruptions and lower equipment sales. However, higher business service revenues, driven by increased usage of shipping offerings and capabilities, limited the decline.

Adjusted EBITDA Details

In the second quarter, adjusted EBITDA declined 25.8% from the year-ago quarter’s figure to $89.5 million.

Segment EBITDA fell 18% from the year-ago quarter’s figure to $131.9 million. Segment EBIT slumped 21% from the year-ago quarter’s figure to $98 million.

Balance Sheet & Cash Flow

As of Jun 30, 2020, cash and cash equivalents (including short-term investments) were $1.02 billion compared with $730.3 million as of Mar 31, 2020.

As of Jun 30, 2020, long-term debt (including current portion) was $2.72 billion, compared with $2.63 billion as of Mar 31, 2020.

Cash flow generated was $153.1 million compared with $66.3 million of net cash used in operations in the previous quarter. Free cash flow was $148.4 million compared with free cash outflow of $47.4 million in the prior quarter.

In the reported quarter, Pitney Bowes paid out dividends worth $9 million.

The company incurred expenses of $5 million under restructuring payments and capital expenditures worth $34 million in the reported quarter.

Guidance

The company refrained from providing guidance for 2020 due to uncertainties related to the COVID-19 outbreak and its negative impact on consumer demand and supply chains.

Zacks Rank & Stocks to Consider

Currently, Pitney Bowes carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Dropbox DBX, Asure Software, Inc. ASUR and Analog Devices (ADI). While both Dropbox and Asure Software sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dropbox, Asure Software, and Analog Devices are scheduled to report earnings on Aug 6, Aug 10 and Aug 19, respectively.

Long-term earnings growth rate of Dropbox, Asure Software, and Analog Devices is pegged at 32.51%, 14% and 13.33%, respectively.

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