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The Suburbanite
  • Diebold posts strong first quarter, raises guidance

  • Increased automated teller machine, coupled with rising demand for integrated services helped Diebold  post strong first quarter earnings and sales.

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  • Rising demand for deposit automation and integrated services helped Diebold post strong first quarter profits and revenue.
    Diebold reported net income of $45.2 million, or 71 cents per share, for the quarter ended March 31, compared with $2.5 million, or 4 cents per share, last year. Revenue rose 14 percent to $698.5 million from $614.2 million.
    Wall Street investors liked the report. Diebold shares closed at $40.68 on Wednesday, up $2.25 for the day. The closing price topped the 52-week high.
    The first quarter performance followed a strong fourth quarter, said Thomas W. Swidarski, Diebold president and chief executive officer.
    The results were positively affected by accelerated ATM installations because of a March deadline for financial institutions to meet Americans with Disabilities Act requirements, he said.
    “Given the strong start to the year and the continued underlying strength in our markets, we have increased confidence in our ability to generate growth as we build our software-led services capabilities,” Swidarski said. “Therefore, we are raising our full-year outlook for both revenue and earnings.”
    Based on the first quarter performance, Diebold expects revenue growth this year of 7 percent to 10 percent, compared with earlier guidance of 3 percent to 6 percent. The company expects stronger growth in the financial self-service business, while growth expectations in the security division are unchanged.
    Diebold is optimistic because global ATM orders have increased 30 percent, Swidarski said. “We feel good about that in every region.”
    Increased ATM sales are being paired with integrated services, which add revenue. Swidarski expects to see more agreements to provide integrated services and noted that technology is accelerating the number of changes banks are making with equipment. Technology also is a factor as electronic security sales rise.
    Diebold also sees positives in its international markets.
    The company restructured its European-Middle East-Africa unit, pulling out of some areas. Although first quarter revenue dropped 9 percent in that market, the business is evolving into a smaller and more profitable operation, Swidarski said.
    Revenue fell 10 percent in Latin America during the quarter but orders have doubled. Most of the increase has come in Brazil, where the company booked an order for 3,800 ATMs.
    The Asia Pacific market posted a 15 percent revenue gain, with much of the growth coming in China. Swidarski said Diebold is working to build a sustainable service business that can expand as the company sells more ATMs in the Asia Pacific region.