In the mercurial world of bank technology stocks, shares of Diebold Inc. have been red-hot lately. The North Canton, Ohio-based automated teller machine manufacturer's stock price has risen 56% in the last three months. Analysts said no single business line is fueling the growth of the stock, which was trading just below $50 late Friday. But the company's stability and its overseas prospects should translate into good results for some time to come. "They have a pretty bright future," said James O. Roeder, analyst at Midwest Research Co., Cleveland. "There is an awful lot of international growth ahead of them." The most recent quarter was the best in Diebold's history, according to company spokesman John Kristoff. Net income grew 25% over a year earlier, to $30.7 million, or 45 cents per share. Earnings per share figures exceeded Wall Street's estimates by 2 cents. The results have helped Diebold's stock recover from a tough run. In April, the company's shares plunged to around $28 when it reported an unexpected decline in new orders. In the wake of that announcement, the company repurchased two million shares, which stabilized the stock. Other factors fueling the stock's resurgence include Diebold's termination of an overseas ATM marketing pact with International Business Machines Corp. (Diebold and IBM have jointly sold ATMs under the Interbold brand since 1990.) Also, growth in the U.S. market remains strong, particularly for cash dispensers. Mr. Roeder attributes such demand to the rise of surcharging. As consumers get more comfortable with paying fees to ATM owners, banks and other companies are scrambling to take advantage of the revenue opportunity by deploying more ATMs and cash dispensers. Surcharging "makes the economics of lower-volume, off-site cash machines more attractive," said Mr. Roeder. As the market for full-service ATMs-those that take deposits as well as dispense cash-flags, Diebold is working to create enhancements that might make its products more attractive. One such enhancement is software that links ATMs to the Internet. Tom Swidarski, director of marketing at Diebold, said banks spend a lot of time and energy to maintain Web sites, so "wouldn't it be nice if you can tie in all that work that's already been done to your ATMs?" Diebold is testing the software with several large banks. One of the potential problems these tests will address is how to keep Internet ATMs from hurting a bank's ability to deliver basic services, such as cash dispensing, quickly. Another new product Diebold has high hopes for is its Remote Teller System. Using two-way video screens and pneumatic tubes, this system lets tellers interact with customers from a distance. The system aims to help banks improve security and decrease branch costs. Remote branches can be cheaper to operate, because the office does not have to be located in prime retail space. Diebold has sold the system to Chase Manhattan Corp., Crestar Financial Corp., SunTrust Banks Inc., and Norwest Corp.

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