Despite drops in second-quarter revenue and profitability, Diebold Inc.’s top executive remained positive about the company’s earnings thanks to accelerated growth in North America.
“Demand for deposit automation, the need to meet Americans with Disabilities Act requirements and ongoing [Payment Card Industry Data Security Standard] compliance fueled momentum during the quarter,” Thomas Swidarski, president and CEO of the North Canton, Ohio-based ATM manufacturer, told analysts during a July 27 conference call to discuss the company’s earnings.
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 on how to use the machines for the blind. ATM deployers and financial institutions must comply with the law by March 15, 2012 (
North America revenue increased 5%, to $337.8 million from $332.6 million for the three months ended June 30. ATM orders in the region increased 14% compared with a year earlier, though Diebold did not specific numbers.
“As our large backlog [of machine orders] in North America continues to convert to revenue, we expect a significant uptake in operating profit for the second half of 2011,” Swidarski said.
Latin America revenue during the quarter totaled $124.2 million, down 29% from $176 million. “Our business in Latin America and Brazil is particularly back-end loaded in 2011, driven by consolidation of large orders,” Swidarski said.
Diebold expects major activity in Latin America going forward, Swidarski added. “We won major deals in Mexico, Colombia, Venezuela, and made solid inroads in Peru, a country in which we’re [underrepresented],” he said.
Revenue from the Europe/Middle East/Africa region was $104 million, up 36% from $76.3 million. Diebold is in the process of restructuring operating procedures in the region and in meeting compliance requirements, Bradley Richardson, the company’s executive vice president and chief financial officer, said during the call.
“We have a long ways to go before we are consistently profitable in [the Europe/Middle East/Africa region] on a month-to-months basis,” Richardson said. “However, I am encouraged by the early results we have generated.”
Revenue in the Asia-Pacific region increased 6%, to $96.1 million from $90.4 million.
As a company, Diebold reported a 33% drop in second-quarter net income, to $20.3 million from $30.4 million a year earlier. Revenue was down 0.4%, to $662.4 million from $665.2 million.
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