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Put That Pitney Bowes Crow on Hold

PBI is rocketing, but the numbers aren't THAT pretty


Man, it’s been a rough couple months.

First, I had to reassess my entire portfolio management philosophy in light of holding fast to the sinking shares of Apple (NASDAQ:AAPL). Now, I discover that I might have been too quick to the trigger in selling my shares of postal equipment provider (and one-time employer) Pitney Bowes (NYSE:PBI) — the stock is up 16% today and almost 30% year-to-date!

With Super Bowl nigh, a Vince Lombardi quote seems apropos: “What the hell is going on out here?”

It appears PBI stunned the investment community by posting fourth-quarter 2012 revenue and earnings that beat Street estimates. In addition to that, it announced it would sell off its low-margin international mail business and look at continuing to cut costs into the future.

That’s a lotta crow to eat.

Unless, of course, that’s just a tasty crust hiding some lousy filling. Some other numbers don’t inspire quite so much confidence:

  • Quarterly revenue of $1.29 billion was 1% lower than the year-ago period, and 2012 annual revenue of $4.9 billion was 4% lower than 2011.
  • PBI’s main driver — the North American Mailing group — saw a 6% year-over-year revenue decline and an 11% EBITDA decline.
  • Adjusted Q4 earnings of 55 cents per share handily beat estimates for 51 cents, but were almost 50% worse than the year-ago’s periods.
  • PBI is expecting little to no revenue growth for 2013, and while earnings guidance of $1.85-$2.00 fell in line with analyst estimates for $1.91. That’s OK, but also less than this year’s earnings — not exactly a reason for unbridled optimism.

Look, I harbor no ill will, and will gladly bite into that crow when the time comes, but I really don’t see what all the fuss — and buying — is about.

While I admittedly missed out on a better selling point today, I’m pretty sure the long-term will justify my call.

Marc Bastow is an Assistant Editor at As of this writing, he was long AAPL.

Article printed from InvestorPlace Media,

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