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Pitney Bowes’ returns dip in first quarter

May 1, 2019 GMT

STAMFORD — Technology firm Pitney Bowes reported Wednesday slightly decreasing revenues and a loss for the first quarter, as it dealt with unexpected hardware-servicing charges, postponement of a federal contract and labor-productivity challenges.

Quarterly returns totaled about $868 million, down 3 percent year-over-year. The loss of $2.7 million reflected about $9 million incurred for a tablet-replacement program to respond to battery-longevity issues in its SendPro C shipping-and-mailing product.

“We’re not pleased with the first-quarter performance,” CEO and President Marc Lautenbach said on a call with investment analysts. “The first quarter was disappointing, it was a bump in the road. That being said, it doesn’t change my view, one iota, of the long-term prospects of this company.”


Meanwhile, the company incurred unexpectedly high shipping rates resulting from the delayed approval of a now-confirmed service agreement with the U.S. Postal Service.

At the same time, executives said they were looking to improve workforce productivity.

“One of the pieces of the work with our consultant is to go through things like scheduling, labor productivity, time studies, etc., that will help us gain productivity overall,” said Chief Financial Officer Stanley Sutula III. “But we’ve also invested heavily in automation.”

Among key divisions, commerce services’ divisions revenues rose 5 percent, to $401 million, driven by the 2017 acquisition of parcel-logistics specialist Newgistics.

Small- and medium-business solutions’ returns dropped 10 percent, to $394 million, affected by lower equipment sales and recurring revenue sources.

Software solutions’ revenues decreased 4 percent, to $73 million, as the division collected lower licensing revenues.

Among other recent moves, the company last month announced the launch of a new business, Wheeler Financial, which would help small and medium-size businesses purchase new equipment and services through loans, leases and other financial arrangements.

Before an upswing in results last year, Pitney had struggled in the previous few years with falling and stagnating earnings, as it sought to diversify its operations.

Pitney officials had considered selling the company, but rising returns persuaded them last year to keep the firm independent.

pschott@stamfordadvocate.com; 203-964-2236; twitter; @paulschott