What happened

Shares of Diebold Nixdorf (DBD) fell 9.1% through 12:20 p.m. EDT today after the maker of ATMs announced Q2 2021 sales and earnings that fell well short of consensus targets.

Analysts had predicted Diebold would earn $0.28 per share, pro forma, on sales of $959.2 million in Q2. In fact, the company earned only $0.10, and on sales of only $943.5 million.  

White arrow declining sharply over a stock market display screen bathed in red.

Image source: Getty Images.

So what

Management tried to put a brave face on the results, highlighting accelerated demand for its products leading to 40% year-over-year order growth. Actual sales, however, grew only 6% in the quarter, while operating profit margin got cut nearly in half, to a slim 1.4%.  

On the bottom line, this worked out to a $0.39-per-share loss when calculated according to generally accepted accounting principles (GAAP) -- far worse than how the $0.10-per-share pro forma profit makes things appear.

Adding to the misery, Diebold noted that its free cash flow for the quarter was negative $79 million, bringing it to $149 million total cash burnt in the first half of this year.

Now what

That's the bad news. The good news is that Diebold is sticking with its previous projection for revenue of between $4 billion and $4.1 billion by year-end, and it still expects to turn free cash flow positive for the year. The other bad news, though, is that Diebold cut its predictions for both adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) -- now no more than $475 million -- and free cash flow -- no more than $140 million.

By the way, free cash flow of $140 million was the company's previous worst-case scenario for 2021. And now it seems that this worst case will come to pass.