Please ensure Javascript is enabled for purposes of website accessibility

Why Diebold Nixdorf Stock Just Crashed

By Rich Smith – Jul 29, 2021 at 1:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Diebold misses earnings -- and prepares to miss again.

What happened

Shares of Diebold Nixdorf (DBD 1.59%) 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.

Rich Smith 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.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.