Pitney Bowes hope for improvement after "flat" first quarter
Pitney Bowes has reported its latest results, which have seen increased sales of mailing equipment, but decline in supplies and rental revenues. The company was also hit by a fire at its largest pre-sorting facility during the quarter, it revealed.
Connecticut-based Pitney Bowes reported revenue for the first three months of 2011 was $1.3bn, a decline of 2%.
Total earnings before interest and taxes was $250m, down 8% year-on-year. Equipment sales have “stabilised” compared to previous periods, the company said. It expects 2011 to continue with low levels of growth, from flat to 3%.
In North America, Pitney Bowes saw continuing increases in placements for its Connect+ mailing system among small and medium-sized businesses, with improved retention rates for existing customers.
The company saw 5% growth in its production mail system revenues in its enterprise business segment, with particular demand for high-speed inserting systems especially in the US. Software revenues grew by 18% year-on-year.
Pitney Bowes said its Mail Services revenues declined 3%, not least because of a fire at its 400,000 square foot Grand Prairie presort plant in February, which disrupted its ability to secure mail discounts. Insurance should cover losses from the incident, the company said, with a new permanent facility expected to be operational in the second quarter, getting up to speed by the third quarter.
International mailing revenues declined slightly, with international equipment sales “flat” compared to the previous first quarter, with strong growth in the Asia Pacific market countered by “slow and uneven economic recovery” in European markets.
Chairman, President and CEO Murray D. Martin said it was a third consecutive quarter of growth in equipment and software sales, driven by demand by mailers to update their hardware and software production platforms.
He said trends in the declining supplies, rentals and financing segments were in line with expectations with signs of improvement on the horizon.
“Against the backdrop of a business and economic environment characterized by gradual improvement at varying rates by sector and geography, we remain focused on investing in solutions which enable businesses to manage physical and digital communications channels with their customers, while continuing to streamline and enhance our operations and processes,” said Martin.
Pitney Bowes is introducing several new products in its Customer Communication Management division, with the digital mail system Volly, an expansion of its Intellijet printing line-up and new cloud-based postal systems including pbSmartPostage and pbSmart Connections.