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Pitney Bowes selling mgmt. service unit for $400M

STAMFORD, Conn. (AP) -- Mailing equipment and software company Pitney Bowes Inc. took a loss in the second quarter on a series of charges and said it will sell its North American management services unit to Apollo Global Management for $400 million.

The company said Tuesday that it wants to focus on the parts of its business that create the most value for shareholders and clients. Shares of Pitney Bowes climbed $1.31, or 10.3 percent, to $16.25 in morning trading. Earlier the stock rose to $17, a penny off its annual high.

Pitney Bowes said the sale should close during the fourth quarter. During the quarter the company took a $97.8 million goodwill impairment charge connected to the management services unit. Pitney Bowes also reported $20 million in restructuring and impairment charges and took a loss on the sale of the European management services business, which is now counted as a discontinued operation.

Pitney Bowes reached a deal in May to sell the U.K. and Ireland portions of the business to Swiss Post for an undisclosed amount.

The company said it lost $9.2 million, or 5 cents per share. A year ago it reported net income of $99.6 million, or 50 cents per share. Pitney Bowes said it earned 52 cents per share from continuing operations in the latest quarter. Revenue fell 1 percent, to $1.16 billion from $1.17 billion.

Analysts had projected net income of 44 cents per share and $1.19 billion in revenue, according to FactSet.

Pitney Bowes' management service business had $921 million in revenue in 2012, a decline of 3 percent from the year before.

The company said revenue from its small and medium business solutions unit fell 3 percent to $597.4 million in the second quarter as recurring revenue in North America decreased. Enterprise business solutions revenue rose 2 percent to $560.8 million on greater production mail revenue.

Pitney Bowes lowered its annual guidance to account for the sale of the management services business and its results over the first half of the year. The company now expects to earn between $1.62 and $1.77 per share from continuing operations, down from $1.85 to $2 per share. It expects $3.94 billion to $4.06 billion in revenue, compared to its previous estimate of $4.9 billion to $5.05 billion.

Analysts were expecting net income of $1.86 per share and $4.81 billion in revenue on average.