Tags: Pitney-Bowes | changing | PBI | FB

Pitney-Bowes Caught in Changing Times for the Mail

By    |   Wednesday, 01 Aug 2012 12:58 PM

Pitney-Bowes (PBI) is a company caught in changing times for physical mail services. Just as the U.S. Post Office struggles to adapt to digital and private courier competitors, the maker of postal scales and related products finds itself seeking a way to transition to newer forms of corporate communication.

Pitney-Bowes is a global provider of software, hardware and services to enable both physical and digital communications and to integrate those physical and digital communications channels. Primarily, that means tools for physical mailing of packages and letters for PBI’s commercial customers.

“Our growth strategies focus on leveraging our historic leadership in physical communication with our expanding capabilities in digital and hybrid communications,” PBI management said in a recent filing.

“We see long-term opportunities in delivering products, software, services and solutions that help customers grow their business by more effectively managing their physical and digital communications with their customers.”

Part of the plan includes the promotion of secure digital mail delivery via a product named Volly, as well as a technical relationship with social network Facebook (FB), management told analysts in a recent call.

“Our best-of-breed technology will provide Facebook developers and ultimately their users high-performance, high-precision location processing across desktops, laptops, tablets and mobile platforms. This is a great example of the kinds of solutions we are developing to help our customers deliver more personalized, relevant communications to their customers,” Pitney-Bowes Chairman and CEO Murray D. Martin told analysts.

Pitney-Bowes has a market cap of $2.67 billion in a sector, commercial supplies and services, where the average company size is $1.69 billion. Its trailing 12-month P/E ratio is 6.68 and its five-year projected price-to-earnings-growth (PEG) ratio is 1, compared to 1.8 for the sector.

Its projected earnings per share growth for the coming year is negative 6.73 percent, compared to a sector average of 14.83 percent.

Not impressive


Very few analyst track PBI. Zacks Investment Research in early July rated the stock at neutral.

“The company’s first-quarter 2012 result was not impressive, as its revenue declined by 5 percent year over year,” Zacks analysts wrote.

“Further, weakness in the Production Mail and Management Services segments as well as fall in the Small and Medium Business Solutions (SMB) recurring revenue streams were the negative contributors. However, this was partially offset by increased equipments sales in its SMB segments.”

Pitney-Bowes next reports on Aug. 2.

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