Pitney Bowes to step up digital plans, after winning Facebook deal
Mail technology giant Pitney Bowes said it is stepping up its investment in the software and digital side of its business to accelerate development of services that go beyond physical mail. The decision was announced this week as the company revealed latest results showing that its performance has been hit by weakness in the production mail side of its business.
The first quarter of 2012 saw revenues down 5% on the same period last year, to $1.3bn.
Particular growth was seen in the software and digital side of the business, the firm said. Recent developments have included signing of a multi-year global geocoding partnership with social media giant Facebook, signed at the end of March.
The multi-year Facebook deal will see Pitney Bowes providing locational intelligence applications for Facebook, which currently states its worldwide membership to be 901m people.
Murray D Martin, the Pitney Bowes president and CEO said: “Our best of breed technology will provide Facebook developers, and ultimately their users, high-performance, high-precision location processing, across desktop, laptop, tablet and mobile platforms. This is a great example of the kinds of solutions Pitney Bowes is developing to help our customers deliver more personalized, relevant communications to their customers.”
Among the areas in which Pitney Bowes said it is increasing its investment is Volly, its digital mail platform set to receive a consumer launch in the second half of 2012. Almost 50 large third party mail service providers have now signed up to use Volly to send digital mail, the firm said.
In February, the company partnered with Adobe to further develop the Volly technology, and in early April it revealed that it will be providing the platform as the basis for the new digital mail service planned by Australia Post.
During the first quarter, Pitney Bowes saw revenues from its mailing equipment business in North America down 7% compared to the same period in 2011, even with some good progress in equipment sales during the quarter.
The firm said slower sales in previous quarters meant that during this quarter rental fees and financing income was down.
International revenue was largely stable – up 1% when adjusted for currency movements – with increased equipment sales particularly in France and the Nordic countries. The company is expanding its Collect+ printer product line in Europe at present, launching recently in Germany and set to launch in France later this year.
Pitney Bowes’ large customer segment, Enterprise Business Solutions, saw its revenue down 13% to $115m for the quarter as larger firms continued to delay capital investment decisions, something being seen across the American economy at the moment.
Among its business segments, Pitney Bowes did achieve revenue growth in its software division, particularly in the Americas, with particularly “strong” global demand for the firm’s Spectrum address and data management system and the Facebook deal helping a 5% increase in revenue for the unit, to $100m for the quarter.
There was also a 4% growth in mail services revenue in the quarter, up to $150m, thanks to increased volumes in Pitney Bowes’ US Standard Mail presorting network, which saw a 211% increase in earnings before tax partly thanks to improved operational efficiency and better margins in its International services, while the unit also continued to benefit from insurance money following last year’s fire at the company’s Dallas presorting plant.
Looking ahead to the rest of the year, Pitney Bowes forecast that its growth would be between plus or minus 2%.
Martin said the company would use productivity improvements to source funds for stepping up its investments going forward. He said: “We believe that these actions will enable us to accelerate investments for growth, while delivering expected earnings within our annual guidance range, even in the current business climate.”