NORTH CANTON, Ohio — Diebold Inc.'s share price went up 3.6 percent yesterday after the company filed its delinquent earnings results for 2007 and the first and second quarters of 2008. The company raised its earnings expectations for 2008 and reported 2007 year-end revenue of $2.97 billion and net income of $40 million.
Earnings per share guidance for the rest of 2008 has increased from $1.47-$1.37 per share to $1.62-$1.52 per share.
In a news release, Diebold says the upward revision in earnings expectations are the result of earlier-than-expected progress from cost-reduction initiatives, improved profitability from the Brazilian voting and lottery businesses, continued demand for the solutions in the global financial markets, and a lower-than-anticipated effective tax rate.
"We are very pleased that we have become current with our financial reporting, which has been a top priority for the company for more than a year," said Thomas W. Swidarski, Diebold president and chief executive. "The significant progress we've made in our cost-reduction initiatives has resulted in some of our anticipated savings coming in earlier than planned. This continued progress in reducing costs positions us well as we work toward achieving our profitability goals for 2009 and beyond. In addition, our global sales environment remains solid despite the well-publicized challenges facing the financial industry in the United States."
Revenue for 2007 was up .8 percent when compared with restated revenue of $2.94 billion for 2006, while net income was down 62 percent from the $105 million reported in '06.
Diebold says its future performance hinges on timing of a self-service upgrade and/or replacement cycle in mature markets, such as the Unites States; high levels of deployment growth for new self-service products in emerging markets, such as Asia-Pacific; demand for new service offerings, including outsourcing or operating a network of ATMs; demand beyond expectations for security products and services for the financial, retail and government sectors; implementation and timeline for new election systems in the United States, the company's strong financial position; and the company's ability to successfully integrate acquisitions.
"Since 2006, we have focused on putting the right leadership in place, improving the key drivers of profitability and positioning the company for future growth," Swidarski said. "We are now seeing the tangible results of these efforts. Recognizing there's much more for us to accomplish, I am increasingly confident in our strategies and our ability to execute on those strategies."
Additionally, in its annual report, which it filed yesterday, Diebold says it expects to successfully cut $100 million from its expenses by the end of the year — a goal defined by its Smart Business 100 program to reduce expenses. Diebold also expects to cut its global workforce by 800 full-time positions, which account for about 5 percent of its overall employment. The majority of those cuts are expected to occur in North America, Brazil and parts of Western Europe.
