The Green-based company is pressing forward with restructuring and cost cutting efforts.
GREEN Diebold Nixdorf reported another quarterly loss as the company pressed forward with cost-cutting programs.
The company still expects to report 2019 revenue in the range of $4.4 billion to $4.5 billion, while cost savings from a DN Now program started last year should reach $160 million. It's projected the company will realize $400 million in savings by 2021.
"We continue to implement key DN Now transformational initiatives, which are streamlining our cost structure, intensifying our customer focus and evolving the company's connected commerce solutions," Gerrard Schmid, president and chief executive officer, said in the earnings release. "We are progressing on a three-year journey to create value and substantially improve financial performance."
On Tuesday morning, Diebold Nixdorf reported a first quarter loss of $132.7 million, or $1.74 per share, nearly double the loss of $73.2 million, or 97 cents per share, in the first quarter last year. Revenue slipped to $1.028 billion from $1.064 billion last year.
Schmid said the revenue results when coupled with DN Now cost-cutting programs helped the company show improved profitability and cash flow during the first quarter. The company has benefited from initiatives that include a services modernization program, global manufacturing improvements and changes in how it packages and sells products.
The DN Now program began shortly after Schmid was hired in February 2018 to replace Andy W. Mattes, who resigned as president and CEO in December 2017.
Changes have included divesting smaller businesses that account for about 5 percent of the revenue. During a conference all with stock analysts, Schmid said the company has divested an IT consulting business, along with bank and retail cash-in-transit businesses in Europe, and has exited the Venezuelan market. Those changes contributed a $10 million gain in the first quarter.
The company reported positive gains in automatic teller business sales and services in the Americas market, while the Eurasia market slipped during the first quarter. Revenue in the Americas market rose to $362.7 million, an 8.7 percent gain from $333.7 million last year. Meanwhile, Eurasia revenue fell to $382.6 million, down 12.1 percent from $435.1 million last year.
ATM sales are rising as financial institutions seek new equipment and software that ties machines to Windows 10 systems. Companies in North and South America have moved faster to make the Windows 10 adjustment than those in Europe and Asia, Schmid told analysts.
Diebold Nixdorf also is being more selective with ATM deals in the Asian markets and looking for more profitable deals. That means backing away from some deals in India and China, while focusing on Southeast Asia. "We're going to pick and chose where we compete in Asia," Schmid told analysts.
The company's retail business saw a 4.3-percent drop in revenue to $282.8 million from $295.4 million. The business, which had been part of Wincor Nixdorf, remains strongest in the European market, but Diebold Nixdorf continues to look for customers in North America.
Schmid said the company had been taking a broad brush approach with the retail equipment business in North America, but now will pursue a targeted approach. In Europe the company has experienced growth in demand for self checkout line equipment, and that could carry over to North America, he said.
Overall, the company is seeing increased orders in the banking segments, while retail remains strong. Schmid said he is encouraged by the momentum shown in order activity.
Investors, however, didn't seem to share the sense of encouragement. The quarterly results were announced before the stock market opened. Diebold Nixdorf shares opened at $10.01, down from a Monday closing price of $12.43. The stock ended the day at $10.09, down $2.34 per share, with more than 6.76 million shares being traded compared with average trading of 2.23 million shares per day.
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