NORTH CANTON, Ohio — Diebold Inc. reported revenue of $890.3 million and net income of $46.5 million for the third quarter of 2008, reflecting increases of 20.2 percent and 65.2 percent, respectively, from the third quarter of 2007. Earnings for the third quarter were 70 cents per share, compared to 42 cents per share during the same period last year — a 66.7 percent increase.
Strong sales in China and Brazil contributed to the growth, said Diebold president and chief executive Tom Swidarski.
"I am very pleased with the strong results we generated in the third quarter," Swidarski said. "We continue to make solid progress on our key initiatives to reduce costs and improve profitability, and this is reflected in our results. While the quarter was very strong, it benefited from 2008 Brazilian election revenue, a business opportunity which historically occurs every other year."
The company also benefited from a large order in China that came earlier than expected, and Swidarski says he expects revenue in China to increase 20 percent by the end of 2008.
"In addition to the unique events that occurred during the quarter, we executed our business plans very effectively," Swidarski said. "As a result of our strong performance, we are again raising our full-year earnings guidance. While this guidance reflects an exceptional year, it does result in fourth-quarter earnings expectations that are lower than what we historically realize."
Total product and services orders for financial self-service and security were up into the low double-digit range, when compared to the prior-year period. Financial self-service orders increased more than 20 percent, with double-digit growth in every geographic region. Security orders, on the other hand, fell to the low double-digit range, as new bank branch construction and retail store openings remain weak in the United States.
Revenue for financial self-service products and services was up 18.3 percent from 3Q '07, while total security revenue fell 6.4 percent. During the quarter, election systems revenue in Brazil was $58.6 million, accounting for more than 85 percent of the increase in total election systems revenue.
Third quarter results include restructuring charges related to severance and reorganization costs from the previously announced reduction in the company's global workforce.
Additionally, the company incurred 29 cents per share in non-routine expenses during the third quarter, compared to 4 cents per share in the third quarter 2007. Those non-routine expenses consisted, primarily, of legal, audit and consultation fees related to the completion of the internal review of other accounting items, the restatement of financial statements and the ongoing Securities and Exchange Commission and U.S. Department of Justice investigations.
