Pitney Bowes to restructure, cut 1,500 jobs
NEW YORK (Reuters) - Mail services provider Pitney Bowes Inc (PBI.N) on Thursday unveiled a restructuring that calls for it to cut some 1,500 jobs, and also said it would increase its share buyback and boost its dividend.
The biggest U.S. supplier of postage meters and mailing machines, which last month reported a lower third-quarter profit, said it would explore strategic options for its U.S. management services business, and revised its net income outlook for the fourth quarter and full year.
Pitney Bowes has been viewed as a safe haven from economic
fluctuations since about 75 percent of its sales come from repeat customers. Its latest moves follow pressure to the parts of its business that are exposed to troubles in the finance industry and the economy overall.
Last month, Pitney reported a 14 percent decline in quarterly profit due to weakness in the financial sector, international markets and its management services business.
"We have determined that our U.S. management services business may have more growth potential and value under an alternative structure," said Chief Executive Officer Murray Martin on a conference call. "We have engaged financial advisors and will be analyzing various alternatives.
The management services business, which runs mail rooms and copy centers for its clients, will see relatively few job cuts from the restructuring, the company said.
Pitney said it will eliminate positions associated with discontinued or de-emphasized product lines and cut additional jobs throughout the company, totaling about 4 percent of its global work force.
Pitney Bowes expects charges of $300 million to $400 million related to the transition of its product line. As a result, it now expects fourth-quarter results to range between a loss of 17 cents a share to a profit of 4 cents a share. For the full year, it expects earnings of $1.76 a share to $1.97 a share.
However, it is maintaining its adjusted earnings per share outlook from continuing operations at 67 cents to 71 cents a share for fourth quarter, and $2.67 to $2.71 a share for fiscal 2007.
The company expects 2008 revenue growth in the range of 6 to 9 percent and adjusted diluted earnings per share from continuing operations in the range of $2.80 to $2.90.
According to Reuters Estimates, analysts are expecting the company to report revenue of $6.4 billion and EPS of $2.91 for fiscal 2008.
In addition, it will increase its quarterly dividend by 2 cents, or about 6 percent, to 35 cents a share.
Pitney Bowes added that it has increased its share buyback plan to $500 million, and says it expects to complete the repurchases within six months. It said the move reflects its "strong cash flow as well as its confidence in the stock as an attractive investment opportunity."
Pitney Bowes shares rose 0.4 percent, or 16 cents, to $38 on the New York Stock Exchange.
(Reporting by Franklin Paul; editing by Carol Bishopric)
