Why Pitney Bowes’ Shares Jumped (PBI)

Why Pitney Bowes’ Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Pitney Bowes (NYSE: PBI ) jumped 18% today after the company released fourth-quarter earnings.

So what: Revenue fell 1% to $1.29 billion and net income dropped 57% to $110.3 million, or $0.55 per share, but it's all about expectations during earnings season. Analysts only expected $1.28 billion in revenue and $0.51 per share in earnings, which is lower than the $0.56 adjusted EPS number used for comparison, so shares surged higher today.

Now what: Pitney Bowes isn't a growth company but the market has thrown it out like there's no value left at all. Next year, management expects earnings of $1.85-$2.00 per share and free cash flow of $600 million-$700 million on at least flat revenue. That makes a $2.8 billion market cap and $14.09 share price look like a steal, even after today's jump. I think shares will continue to move higher.

Interested in more info on Pitney Bowes? Add it to your watchlist by clicking here.

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Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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Report this Comment On January 31, 2013, at 5:43 PM, stockmover wrote:

I've been LONG PBI for almost 2 years and enjoying the consistently high dividend payments. I believe PBI has erroneously been beaten down by the analyst without realizing that management has been transitioning PBI into a larger software company with firm contracts with UPS and Fed Ex. Look for future surprises Fools.