Why Shares of Pitney Bowes Popped Today

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 mailing equipment maker Pitney Bowes (NYSE: PBI  ) jumped as much as 14% today before settling to a 9% gain after reporting earnings.

So what: Third-quarter revenue was down 1% from a year ago, to $939 million, but adjusted earnings per share from continuing operations rose from $0.44 a year ago to $0.49 last quarter. Analysts expected $972.3 million in revenue, so the top line was disappointing, but they only predicted $0.40 in earnings per share, so the clear focus is on the bottom line beat today.  

Now what: The earnings beat was the first time in a year the company has hit expectations, so it's not time to call this a trend. I'm more concerned about flat revenue, which isn't a good sign for any company. I like the moves into digital, but I'm just not a fan of the mail business, and it's growth days are in the past, which will keep me out of the stock today.  

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  • Report this Comment On October 29, 2013, at 7:10 PM, wjodea1 wrote:

    See you at 30 Travis. Near 100% return in 10 months and another Fool still can't/won't call it a turn around in the making when they see it.

    Please do your readers/reader a service and do more research before blogging.

  • Report this Comment On October 30, 2013, at 8:57 AM, CitySlicker wrote:

    Your analysis of PBI completely ignores the massive short position overhanging this stock. Of the 200 million shares outstanding, 46 million of them have been sold short, an amazing number when you consider that 92% of this stock is institutionally held. I've thought for some time that this is unsustainable, that any remotely positive news would kick off the short squeeze to end all short squeezes. So far, I've been wrong, the market seems quite orderly, but I don't think anyone should be surprised by strong upticks now and again in response to any news short of utter doom.

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