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Diebold reports higher third-quarter net income and revenues
Diebold Inc. today reported a strong increase in U.S. bank orders for intelligent deposit ATMs.
October 27, 2010
Diebold Inc. today reported a strong increase in U.S. bank orders for intelligent deposit ATMs due to a variety of factors affecting the industry.
"The orders are across the board. It is not just the big banks that are ordering intelligent deposit ATMs. It is crystal clear that there is engagement at every level," Thomas W. Swidarski, president and CEO of Diebold, told analysts during the manufacturer's third-quarter conference call.
Swidarsksi reported that deposit automation shipments for regional banks increased significantly during the quarter, which ended September 30. He added that momentum for orders continues to build, but orders were not at the levels reported in 2005 and 2006.
Diebold, the world's third-largest ATM manufacturer based on annual shipments, reported a net income of $46.1 million compared with a net loss of $7.2 million for the same three-month period last year.
The North Canton, Ohio-based company reported revenues of $748.6 million, up 16 percent compared with $645.2 million for the same three-month period last year. Revenues, however, fell short of the Thomson Reuters consensus estimate of $768.7 million.
Financial Self-Service Products reported revenues of $237.7 million in the third quarter, up 9.7 percent compared with $216.5 million for the same three-month period last year. Financial Self-Service Services reported $273 million in revenues, up 1.5 percent compared with $268.8 million in 2009's third quarter.
By geographic segment, Diebold North America reported third-quarter revenues of $349.7 million, up 7 percent compared with $325 million for the same period last year.
Diebold Latin America, which includes Brazil, reported $248.6 million in revenue, up 66 percent compared to $150.2 million for the same three-month period last year. Revenues surged in Latin America because Diebold delivered 195,000 voting terminals for the country's Oct. 3 national elections.
Diebold Asia Pacific reported revenues of $68.4 million, down 30 percent compared with $98.1 million. Europe Middle East Africa reported revenues of $81.9 million, up 14 percent compared with $71.6 million for the same three-month period last year.
Financial Self-Service solution orders increased 12 percent year-over-year, partly driven by increased replacement activity in North America, company officials said. Overall orders by global geography increased 13 percent.
"Each geographic region delivered order growth during the period, which affirms our earlier assessment that our industry is beginning to recover," Swidarski said.
In the United States, compliance with PCI and the Americans with Disabilities Act (ADA) are helping drive new ATM orders among regional banks, Swidarski said. Diebold is meeting with banks to ensure that the financial institutions comply with PCI and ADA rules, which has resulted in ATM sales.
He added that Bank of America also has been running television commercials, promoting the efficiency of its intelligent deposit ATMs. The commercials have sparked interest among banks about the machines, Swidarski said. Charlotte, N.C.-based Bank of America is the nation's largest bank owner of ATMs.
"The strength of the U.S. market was the highlight of the earnings report," said Gil B. Luria, senior vice president of Equity Research for Financial Technology at Wedbush Securities in Los Angeles.
"Diebold is on track to maintaining flat revenue in the U.S. in spite of the completion of the Bank of America rollout last year, which is better than anybody expected," Luria said. "Part of the reason is a ramp up in activity at other U.S. banks (regionals), which is in turn driven by the prominence of deposit automation in Bank of America marketing as well as the need for PCI and ADA compliance."
Swidarski said he was pleased with Diebold's quarterly performance.
"We delivered meaningful top-line growth and significant improvement in earnings," he said.
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Diebold Nixdorf
As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.
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