Diebold Inc. experienced drops in third-quarter revenue and profitability, but the ATM maker's chief executive highlighted gains it made in North America
"North America continues to perform exceptionally well with high demand for a financial self-service [products]," said Thomas Swidarski, president and CEO of North Canton, Ohio, company during an Oct. 27 conference call.
Diebold's market improvement and profitability combined with continued revenue gains in North America led to the company increasing its full-year EPS guidance to a range of $2.15 to $2.25 per share from a range of $2.00 to $2.20.
Overall, Diebold reported a 5% drop in third-quarter net income, to $41.8 million from $44.1 million. Revenue was down 5%, to $709.3 million from $748.6 million.
North America revenue increased 4%, to $364.1 million for the three months ended Sept. 30 from $349.6 million during the same period last year. ATM orders in the region increased 11% from a year earlier, though Diebold did not give specific numbers.
"U.S. regional bank product orders and financial self-service orders once again increased well in excess of 100% and expected revenue is beginning to materialize [from those orders] as we approach the end of the year," Swidarski said.
Regulatory requirements and ATM deposit automation continue to drive demand, he said, adding that Diebold saw deposit-automation shipments increase 50% in North America.
"Deposit-automation shipments in the regional bank segment increased more than 200% during the quarter and up 150% year to date," Swidarski said.
U.S. financial institutions are upgrading ATMs to meet the Americans with Disabilities Act requirements by adjusting machine heights for wheelchair access, adding raised symbols on keypads and placing headphone jacks for voice-guided instructions for the blind on how to use the machines. ATM deployers and financial institutions must comply with the law by March 15, 2012.
Latin America revenue, which includes Brazil, during the quarter totaled $170.4 million, down 32% from $248.6 million. ATM orders in the region declined 12% from a year earlier.
Diebold had two potentially significant orders in the region pushed into the fourth quarter, which will not affect revenue until next year, Swidarski said.
"Moving forward, we have an opportunity to grow our share even further as one of the large banks in [Brazil] opens up its purchases to a broad base of suppliers for the very first time," he said.
Revenue from the Europe/Middle East/Africa region was $73.2 million, down 11% from $81.9 million.
Revenue in the Asia-Pacific region increased 49%, to $101.4 million from $68.3 million. Orders for products and services in the region declined 9% as a large order in China slipped into fourth quarter, Swidarski said. He credited third-quarter growth in the region to Diebold's integrated services business, particularly in India where the company monitors 40% of the ATMs in the country.
"I'm very encouraged with this growth as it reflects our strategy to grow services aggressively in Asia and protect our profitability," Swidarski added.
