What happened

Shares of small-cap postal delivery solutions provider Pitney Bowes (NYSE:PBI) tanked 21.5% in 1:20 p.m. EST trading this afternoon, despite a modest earnings beat reported this morning.  

Heading into earnings, analysts had estimated that Pitney Bowes earned $0.10 per share, pro forma, on $939 million in revenue in the fourth quarter of 2020. As it turns out, Pitney Bowes earned $0.13 per share, and on sales of more than $1 billion.

Big red arrow going down over a stock chart

Image source: Getty Images.

So what

Pitney Bowes CEO Marc Lautenbach exulted that Q4 produced the company's "highest modern day, organic [revenue] growth rate on record for us," resulting in "a remarkable ending to an extraordinary year."

Sales were up 24% year over year in the quarter and, in addition to the pro forma number, Pitney Bowes reported an $0.11 per share profit as calculated according to generally accepted accounting principles (GAAP), and $0.09 per share, GAAP, from continuing operations.

For the full year, however, Pitney's sales grew 11%, but the company's GAAP profit was negative -- a $1.06 per share loss. (The pro forma number for the year was a profit of $0.30 per share.)  

Now what

Looking ahead to 2021, Pitney Bowes anticipates continuing to grow its revenue, but only "in the low-to-mid single digit range." Applied to the company's $3.6 billion in 2020 revenue, that seems to imply sales of perhaps $3.7 billion, a number that is roughly in line with analyst projections.

Pro forma earnings are also expected to grow, although management did not say by how much. Analysts are forecasting $0.40 -- more than Pitney earned in 2020, but still less than it earned in 2019 -- which would seem to imply that 2021 will be something less than "extraordinary" for Pitney Bowes.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.