The numbers might not sound great, but Diebold's top executives find them encouraging.
Wall Street investors also appear to like what the company reported for third quarter results on Wednesday, as the share price rose in above average trading.
"We saw positive results from our ongoing business improvement and cost reduction efforts during the third quarter," Andy W. Mattes, Diebold president and chief executive officer, said in a press release.
"After five months on the job, I am confident we have identified the appropriate steps to build on our core strengths and capitalize on key opportunities in the marketplace," he added.
THIRD QUARTER LOSS
Diebold posted a $21.7 million loss, or a loss of 34 cents per share, for the third quarter ended Sept. 30, compared with a $16.2 million profit, or 26 cents per share, reported last year. Revenue slipped to $705.4 million, less than 1 percent lower than $709.9 million reported last year.
The company said the loss came because of a pre-tax goodwill impairment charge of $70 million in its Brazilian business. The charge is tied to a move by Brazilian financial institutions to conduct auction purchases for automated teller machines, as well as new competitors in the ATM business,.
Revenue gains in Diebold's core financial self-service and security business were offset by a decrease in the election and lottery business it has in Brazil. In the global financial self-service business, growth shown in international regions was offset by declines in North America.
Through the first nine months, Diebold is carrying a loss of $140.2 million, or a loss of $2.20 per share, compared with profits of $85.5 million, or $1.36 per share, during 2012. Revenue of $2.05 billion is down 4.9 percent from $2.15 billion last year.
The results went over well with investors, as Diebold's stock opened higher and traded actively Wednesday.
Shares closed at $30.10 — a 40 cents gain for the day — but had traded higher earlier in the day. More than 2.33 million shares traded, compared with a daily average of 844,400.
Mattes told stock analysts during a conference call that the company is encouraged by increased global order activity, and higher sales outside North America.
While sales in the North American markets are down 10 percent, the company sees opportunities with potential sales of branch transformation products, outsourcing and software.
Mattes said the company has 20 North American customers lined up to test Diebold's in-lobby terminal product. He also touted Diebold's deal to install Windows 7 software on ATMs for U.S. Bank.
The company's Electronic Security business saw increased orders during the quarter, Mattes told analysts. He said the business made gains with existing customers and added to new customers to services that will help generate recurring monthly revenue.
Page 2 of 2 - During the third quarter, Diebold resolved a dispute with the Securities and Exchange Commission by agreeing to pay a $48 million fine. The company also offered early retirement to employees. Those expenses will affect fourth quarter results, the company said.
But while the company appears to be aimed in the right direction, Mattes cautioned more than once that Diebold plenty to address.
"There is still a great deal of work to be done before we can finalize our full potential as a company," Mattes told analysts.