Pitney Bowes Posts New Low on Lack of Demand (PBI, XRX, HPQ)

Business equipment firm Pitney Bowes Inc. (NYSE: PBI) reported first quarter earnings after markets closed last night, and while the company slightly exceeded expectations for adjust EPS and revenues, the stock is sinking today on comments related to lackluster equipment sales. Concerning its North American Mailing division the company had this to say:

[R]evenue was adversely impacted by lower rentals and financing revenue as a result of lower equipment sales in prior periods. Revenue was also impacted by a decline in supplies revenue due to fewer meters in service in the U.S. and lower mail volumes.

Other business equipment firms such as Xerox Corp. (NYSE: XRX) and Hewlett-Packard Co. (NYSE: HPQ) are also seeing flatter revenues due to cautious buyers, particularly in the small-to-medium sector. Economic uncertainty makes businesses hesitate to invest in more or newer equipment, regardless of whether or not the business has sufficient cash or credit because the business just can’t accurately predict future cash flows.

About its large customers, Pitney Bowes had this to say:

Many large enterprise customers, across business sectors, continued to prolong their capital investment decisions, and are retaining their current equipment longer than in prior years. This has caused delays in orders for inserting and production print equipment, especially in the U.S., thus adversely impacting revenue.

The company reaffirmed its adjusted EPS guidance for the full year at $2.05-$2.25. The consensus estimate calls for adjusted EPS of $2.12. Pitney Bowes said that 2012 revenue would come in within a range of -2% to +2% compared with 2011 revenue. The consensus estimate calls for revenue of $5.23 billion, down -0.9% from last year.

Pitney Bowes’ shares are off about -6.6% at $15.69, after posting a new 52-week low of $15.11. The prior range was $16.53-$25.03.

Paul Ausick