The revenue decline was driven by lower license revenue. Revenue benefited from growth in Location Intelligence license revenue but was offset by lower Customer Information Management revenue. The Company is continuing to see progress in developing the indirect channel. EBIT margin declined from prior year largely driven by the lower licensing revenue.
Global Ecommerce
The sustained double-digit revenue growth was largely driven by strong volumes in the UK outbound marketplace as well as growth in domestic shipping. The EBIT loss was driven primarily by investments in market growth opportunities. The Company continues to invest in its cross-border solutions and domestic shipping capabilities.
2017 Guidance
Based on year-to-date results, the Company is narrowing its annual guidance range for revenue, adjusted EPS and free cash flow.
The Company’s guidance for the full year 2017 is now expected to be:
- Revenue, on a constant currency basis, to be in the range of flat to 1 percent growth, when compared to 2016. This has been updated from the original range of a 2 percent decline to 1 percent growth.
- Adjusted EPS to be in the range of $1.70 to $1.78. This has been updated from the original range of $1.70 to $1.85.
- Free cash flow to be in the range of $400 million to $430 million. This has been updated from the original range of $400 million to $460 million.
The Company is also narrowing its annual tax range on adjusted earnings. The Company now expects to be in the range of 31 percent to 33 percent as compared to the original range of 31 percent to 35 percent.
This guidance discusses future results, which are inherently subject to unforeseen risks and developments. As such, discussions about the business outlook should be read in the context of an uncertain future, as well as the risk factors identified in the safe harbor language at the end of this release and as more fully outlined in the Company's 2016 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission.
This guidance excludes any unusual items that may occur or additional portfolio or restructuring actions, not specifically identified, as the Company implements plans to further streamline its operations and reduce costs. Revenue guidance is provided on a constant currency basis. The Company cannot reasonably predict the impact that future changes in currency exchange rates will have on revenue and net income. Additionally, the Company cannot provide GAAP EPS and GAAP cash from operations guidance due to the uncertainty of future potential restructurings, goodwill and asset write-downs, unusual tax settlements or payments and contributions to its pension funds, acquisitions, divestitures and other potential adjustments, which could (individually or in the aggregate) have a material impact on the Company’s performance. The Company’s guidance is based on an assumption that the global economy and foreign exchange markets in 2017 will not change significantly.
Conference Call and Webcast
Management of Pitney Bowes will discuss the Company’s results in a broadcast over the Internet today at 8:00 a.m. ET. Instructions for listening to the earnings results via the Web are available on the Investor Relations page of the Company’s web site at www.pitneybowes.com.
About Pitney Bowes
Pitney Bowes (NYSE: PBI), is a global technology company powering billions of transactions – physical and digital – in the connected and borderless world of commerce. Clients around the world, including 90 percent of the Fortune 500, rely on products, solutions and services from Pitney Bowes in the areas of customer information management, location intelligence, customer engagement, shipping, mailing, and global ecommerce. And with the innovative Pitney Bowes Commerce Cloud, clients can access the broad range of Pitney Bowes solutions, analytics, and APIs to drive commerce. For additional information visit Pitney Bowes, the Craftsmen of Commerce, at www.pitneybowes.com.
Use of Non-GAAP Measures
The Company's financial results are reported in accordance with generally accepted accounting principles (GAAP); however, in our disclosures we use certain non-GAAP measures, such as adjusted earnings before interest and taxes, Adjusted EPS, revenue growth on a constant currency basis, free cash flow and Segment EBIT.
The Company reports measures such as adjusted earnings before
interest and taxes (EBIT) and Adjusted EPS and adjusted income from
continuing operations to exclude the impact of special items like
restructuring charges, tax adjustments, goodwill and asset write-downs,
and costs related to dispositions. While these are actual Company
expenses, they can mask underlying trends associated with its business.
Such items are often inconsistent in amount and frequency and as
such, the adjustments allow an investor greater insight into the current
underlying operating trends of the business.
