Why Pitney Bowes Inc. Stock Surged Today

FAN Editor

What happened

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Shares of office solutions specialist Pitney Bowes Inc. (NYSE: PBI) were stacking higher today after the company beat estimates in its fourth-quarter earnings report and posted solid 2018 guidance. As of 11:47 a.m. EST, the stock was up 16.1%.

So what

Revenue in the period increased 18% to $1.05 billion, largely due to its earlier acquisition of Newgistics, a digital commerce company. That figure easily beat estimates at $991 million. Adjusted earnings per share fell as expected, declining from $0.53 to $0.40, but that also topped expectations of $0.37.

CEO Marc Lautenbach noted that revenue grew in four out of six business segments for the year, and summed up the performance, saying, “Pitney Bowes is a different company today than it was five years ago. Our strategy is working and the investments we have made for the long-term across all of our businesses are paying off.”

Now what

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Pitney Bowes, which offers mailing and digital commerce services to businesses, has long held appeal for dividend investors, but the stock has struggled lately, on a four-year slump, with earnings falling as revenue from its mailing segment has consistently declined. Still, the acquisition of Newgisitcs gives the company added growth and a foothold in digital commerce, and the dividend yield of 5.8% should act as a floor on the stock.

For the year ahead, the company sees revenue growth of 9%-13%, better than the analyst consensus and adjusted EPS of $1.40-$1.55, following $1.41 last year. If Pitney Bowes can deliver earnings growth, the stock should move higher over the coming quarters.

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