Shares of Pitney Bowes (NYSE:PBI) slumped on Tuesday following the company's third-quarter report. The supplier of mailing and shipping solutions suffered a revenue decline, missed analyst estimates across the board, and gave a disappointing update on full-year guidance. At 11:15 a.m. EDT, the stock was down about 17%.
Pitney Bowes reported third-quarter revenue of $839 million, down 4% year over year and about $13 million below the average analyst estimate. Revenue from digital commerce solutions declined by 1%, with strong growth in e-commerce marketplace and retail wiped out by weakness in software solutions and office shipping.
Solutions for small and medium businesses saw a 7% slump in revenue, while enterprise business solutions grew revenue by 1%. Within the enterprise solutions segment, production mail produced a 5% revenue increase, while presort services revenue fell by 2%.
Non-GAAP earnings per share (EPS) came in at $0.44, up from $0.43 during the prior-year period but $0.02 below analyst expectations. GAAP EPS was $0.35, down from $0.44, with restructuring and other one-time costs responsible for the drop.
CEO Marc Lautenbach was upbeat about Pitney Bowes' progress:
We continued to make progress against our strategic initiatives to transform Pitney Bowes. Our new enterprise business platform, which was deployed in the second quarter, continues to provide operational benefits, while our new products and solutions introduced in the second and third quarter tied to the Pitney Bowes Commerce Cloud are resonating well with our clients and gaining traction.
Pitney Bowes now expects to be at the low end of its previously announced annual guidance range for revenue and non-GAAP EPS. The company expects revenue to decline on a constant currency basis by 1% to 3% and for non-GAAP EPS to come in between $1.75 and $1.82. The company produced non-GAAP EPS of $1.75 in 2015.
While Pitney Bowes has been able to maintain its profitability amid slumping revenue, investors punished the stock for coming up short of expectations. Shares have been moving lower since mid-2014, and Tuesday's decline continues that trend.