Please ensure Javascript is enabled for purposes of website accessibility

Why Pitney Bowes Inc. Shares Plunged Today

By Brian D. Pacampara, CFA – Feb 2, 2016 at 12:32PM

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

The mailing-equipment specialist fails to deliver on any transformation traction.

What: Shares of communications technologist Pitney Bowes (PBI -8.30%) were down 10.3% at 10 a.m. ET on Tuesday after its quarterly results and outlook missed Wall Street expectations.

So what: Pitney Bowes shares have slumped over the past year on concerns that its mail-equipment segment is in secular decline, and today's poor Q4 results -- EPS of $0.48 missed the consensus estimate by $0.05 on a revenue decline of 4.8% -- coupled with downbeat guidance only reinforce those worries. In fact, revenue in its small and medium business solutions segment -- comprised of North America and international mailing -- sank 6%, while production mail revenue declined 9%, giving analysts plenty of negative vibes over its growth prospects going forward.  

Now what: Management now sees full-year 2016 EPS of $1.80 to $2.00 on revenue of $3.54 billion to $3.65 billion, versus the consensus estimate of $2.03 and $3.6 billion. "We made substantial progress against our strategic objectives in 2015 and entered 2016 in a stronger position," said President and CEO Marc Lautenbach. "As we look forward, we continue to feel good about where we are in our transformation and our ability to deliver long term value to our shareholders." When you couple Pitney's still-hefty debt load with the strong secular headwinds facing its business model, however, I wouldn't bet too heavily on that turnaround talk just yet. 

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Pitney Bowes Inc. Stock Quote
Pitney Bowes Inc.
PBI
$2.43 (-8.30%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

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