Shares of Pitney Bowes (NYSE:PBI) jumped 19.3% on Thursday after the mail metering and e-commerce shipping solutions company announced strong third-quarter 2018 earnings.
More specifically, Pitney Bowes' revenue climbed 13.6% year over year, to $832.9 million, translating to adjusted earnings of $0.27 per share. Analysts, on average, were expecting slightly lower earnings of $0.26 per share on higher revenue of $852.7 million.
Pitney Bowes' top-line growth was comprised of a 59% increase in commerce services sales to $358 million, a 4% decline in SMB solutions revenue to $399 million, and a 19% drop in software solutions sales to $76 million.
CEO Marc Lautenbach elaborated:
Through the first nine months of the year, revenue is up, spending is down, and we have substantially reduced our debt. In the same period, we have introduced several new innovative shipping, mailing, software and data solutions, delivered new shipping capabilities through contemporary API technology, and most recently, opened up a highly automated Fulfillment, Delivery and Returns Super Center in Greenwood, Indiana. Today, shipping revenues represent more than 30 percent of our overall revenue and that number continues to grow.
Above all, Pitney Bowes appeared to make significant progress toward its strategic goal of shifting its portfolio of products and services away from its core mailing business and toward higher-growth markets like e-commerce, shipping solutions, and software.
Looking to the full year of 2018, Pitney Bowes reiterated its previous outlook for revenue to increase from 11% to 15% at constant currencies, with adjusted earnings per share of $1.15 to $1.30. For perspective, most analysts were modeling earnings near the low end of that range.
In the end, Pitney Bowes still has plenty of work to do in order to fully realize its long-term vision. The stock is trading near its 52-week low heading into this report, so it's hard to blame the market for bidding shares up today in response.