By Kristin Jones
Diebold Inc. (DBD) swung to a second-quarter loss as the maker
of automated teller machines recorded declining revenue and heavy
costs.
Shares fell 5.6% to $31.20 in premarket trading as results fell
far short of analyst expectations. Through the close, the stock was
up 7.9% since the start of the year.
Diebold also gave a weak full-year earnings view and lowered its
revenue outlook. It now seeing earnings of $1.30 to $1.40,
excluding a valuation allowance on certain Brazil deferred tax
assets of 51 cents. Analysts polled by Thomson Reuters recently
expected $1.83. The company now sees revenue down 5% to 7% from the
previous year, from its previous expectation of flat revenue.
The company cited the pace of improvement in the U.S. regional
ATM market and the timing of major tenders in Brazil as factors in
the lower-than-expected earnings and revenue.
Facing a slowdown in spending by regional banks and competition
from rival NCR Corp. (NCR), Diebold has embarked on a restructuring
effort aimed at cutting costs.
The company in June hired former Hewlett-Packard Co. (HPQ)
executive Andy W. Mattes as president and chief executive to lead
the turnaround. Mr. Mattes succeeded Thomas W. Swidarski, who was
ousted by the board in January.
Mr. Mattes said Tuesday that the latest results were "not in
line with our capabilities and potential as a company. He said
cutting costs will improve the company's cash position and enable
it to invest to grow the top line.
For the latest quarter, Diebold reported a loss of $98.6
million, or $1.55 a share, compared with a year-earlier profit of
from $25.3 million, or 39 cents a share. The latest quarter
includes a valuation allowance on Brazil deferred tax assets of 51
cents. Excluding items, the company reported a per-share loss of 25
cents, compared with a profit of 47 cents a share a year earlier.
Revenue decreased 4.9% to $707.1 million.
Analysts were expecting per-share earnings of 27 cents a share
on revenue of $685 million.
Gross margin narrowed to 22.3% from 24.7%.
The latest quarter included income-tax costs of $71.9 million,
compared with $14.7 million a year earlier.
Write to Kristin Jones at kristin.jones@wsj.com
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