Pitney Bowes Declared Quarterly Dividends: What Is It Expecting Next?

Yesterday’s Consumer Pops and Drops: CALM, NWL, and TSN

(Continued from Prior Part)

Price movement of Pitney Bowes

Pitney Bowes (PBI) has a market cap of $3.5 billion. PBI fell by 0.65% to close at $18.23 per share on May 9, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -12.9%, -13.5%, and -10.7%, respectively, on the same day.

This means that PBI is trading 12.4% below its 20-day moving average, 11.3% below its 50-day moving average, and 8.3% below its 200-day moving average.

Related ETF and peers

The ALPS Sector Dividend Dogs ETF (SDOG) invests 2.1% of its holdings in Pitney Bowes. This ETF tracks an equal-weighted index of the five highest-yielding S&P 500 securities in each sector. The YTD price movement of SDOG was 9.9% on May 9, 2016.

The market caps of Pitney Bowes’ competitors are as follows:

• Lexmark International (LXK): $2.4 billion

• Xerox Corporation (XRX): $9.3 billion

• Canon-ADR (CAJ): $37.5 billion

Pitney Bowes declared dividends

Pitney Bowes has declared the following quarterly dividends:

• It declared a quarterly cash dividend of ~$0.19 per share on its common stock. The dividend will be paid on June 13, 2016, to shareholders of record at the close of business on May 29, 2016.

• It declared a quarterly cash dividend of $0.53 per share on its $2.12 convertible preference stock. The dividend will be paid on July 1, 2016, to shareholders of record at the close of business on June 15, 2016.

• It declared a quarterly cash dividend of $0.50 per share on its 4% convertible cumulative preferred stock. The dividend will be paid on August 1, 2016, to shareholders of record at the close of business on July 15, 2016.

Performance of Pitney Bowes in fiscal 1Q16

Pitney Bowes reported total fiscal 1Q16 revenues of $844.6 million, which is 5.2% lower than its $890.7 million in revenues in fiscal 1Q15. Revenues from equipment sales, supplies, software, rentals, financing, support services, and business services fell by 4.0%, 1.8%, 9.6%, 8.7%, 7.8%, 8.1%, and 0.24%, respectively, in fiscal 1Q16, as compared to fiscal 1Q15.

Revenues from its SMB (Small and Medium Business) Solutions and Enterprise Business Solutions segments fell by 5.1% and 2.8%, respectively. Revenue from its Digital Commerce Solutions segment rose by 9.1% YoY (year-over-year) in fiscal 1Q16. The latter segment reported restructuring charges of $6.9 million in fiscal 1Q16.

Net income and EPS

PBI’s net income and EPS (earnings per share) fell to $58.0 million and $0.30, respectively, in fiscal 1Q16, compared to $80.6 million and $0.40, respectively, in fiscal 1Q15. The company reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $188.2 million in fiscal 1Q16, which is 14.8% lower than in fiscal 1Q15.

At the same time, PBI’s cash and cash equivalents fell by 5.8%, and its inventories rose by 13.1% in fiscal 1Q16, as compared to fiscal 4Q15. Its current ratio rose to 1.1x in fiscal 1Q16, as compared to 1.0x in fiscal 4Q15.

Projections

Pitney Bowes (PBI) has made the following projections for fiscal 2016:

• revenue growth in the range of -1%–3% on a constant currency basis

• adjusted and GAAP (generally accepted accounting principles) EPS from continuing operations in the range of $1.80–$2.00

• free cash flows in the range of $425 million–$525 million

• tax rate in the range of 32%–35%.

• revenue impact from recent market exits

The company also expects revenue growth in the double digits for Digital Commerce Solutions, flat-to-modest revenue growth for Enterprise Business Solutions, and a low-single-digit decline for SMB Solutions.

Now let’s take a look at Lancaster Colony Corporation.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Who Were the Outliers in the Consumer Space on May 9?

• Part 2 - DA Davidson Downgrades Cal-Maine Foods to ‘Underperform’

• Part 4 - BB&T Capital Downgrades Lancaster Colony to ‘Hold’