Diebold shares suffer on news of lowered earnings expectations
Diebold Nixdorf Inc. shares took a dive on Wednesday on news that the company was making a downward adjustment to its full-year financial outlook for 2017. Shares plummeted nearly 23 percent, dropping from $28 to $21.60.
Full-year revenue for the company is now expected to be in the range of $4.7 billion to $4.8 billion, down from a previous estimate of $5 billion, the company said in a press release.
Earnings per share on a GAAP basis is now expected to be in the range of $(1.65)–$(1.45), or $0.95–$1.15 on a non-GAAP basis.
The company is in the process of closing its books for the second quarter 2017, and expects orders, revenue and adjusted EBITDA in the period to be comparable with first quarter results.
The company explained the reasons for the adjustment in the release, saying that large, complex projects with higher software content were resulting in a longer customer decision-making process and order-to-revenue conversion cycle.
Additionally, the release said, a delay in systems rollouts has had a negative impact on the company's service business.
These factors, combined with investments in hiring and training in the service organization will pressure near-term margins, the company said.
The press release included the following statement from Diebold Nixdorf President and CEO Andy W. Mattes:
We are encouraged by the positive feedback we are receiving from customers, which demonstrates our strong competitive position. Clearly, we are disappointed in our near-term financial performance. That said, we continue to improve our operating expenses from the prior year and are taking steps to further accelerate our cost reductions. As a result, we are increasing our DN2020 net savings target to $240 million. We are committed to realizing the full potential of our new company and delivering results for all our stakeholders.
Companies: Diebold Nixdorf