What happened

ATM maker and financial technology company Diebold Nixdorf (NYSE:DBD) reported its third-quarter earnings on Wednesday. Shares were up by as much as 30% following the earnings release, but quickly gave back much of the gains. As of noon EDT on Wednesday, Diebold was still up by about 8%, so it's fair to say that investors are happy with the results.

So what

Diebold reported a steep third-quarter loss of $0.61 per share on an adjusted basis, which was actually much worse than analysts had expected, so it may seem strange that the stock is up. However, Diebold topped estimates on revenue, so the headline numbers were a mixed bag.

Hand removing a card from an ATM.

Image source: Getty Images.

More important than the results themselves, however, was the fact that Diebold's management sounds optimistic about the quarter and the company's future, particularly when it comes to getting costs under control.

As CEO Gerrard Schmid put it, "Our year-over-year revenue performance was the strongest since the business combination in 2016, supported by solid software and product growth."

Additionally, the company said that it is seeing even better results from its cost-saving initiative than it had expected. Diebold now expects to realize $250 million in annual cost savings by the end of 2021 -- $50 million more than previously stated.

Now what

Diebold's stock price plunged after surprising investors with a second-quarter loss and indicating that it could have trouble repaying its debts. This not only scared investors but triggered a wave of short-selling that continued to drive the share price down for weeks after the report. In fact, even after today's pop, Diebold is down by nearly 65% over the past three months.

In a nutshell, Diebold's third quarter was some much-needed good news for shareholders. Twenty-seven percent of Diebold's outstanding shares are currently sold short, so if the good news continues, we could see quite a bit of short covering ahead.

Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.