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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  • 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.

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