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Small and regional banks' reluctance to buy advanced-function ATMs helped cause Diebold Inc. today to report a $7.2 million net loss for the third-quarter ended Sept. 30; the ATM manufacturer reported net income of $46.5 million for the same three-month period last year. Leslie A. Pierce, Diebold's interim chief financial officer and corporate controller, reminded analysts during a conference call that 2008's third quarter was the best in the company's history because of a large number of ATM orders from Brazil and China. North Canton, Ohio-based Diebold, the world's third-largest ATM manufacturer based on annual shipments, reported third-quarter revenues of $645.2 million, down 25.8% from $869.1 million for the same three-month period last year. Diebold's financial self–service products unit, which includes ATMs, reported sales $216.5 million, down 33.3% compared with $324.4 million. Thomas Swidarski, Diebold president and CEO, said during the call the company faced significant headwinds in its core financial markets, including the continuing reluctance by small and regional banks to purchase envelope-free ATMs. The company's services business, which includes Diebold's management of banks' ATM networks or integrated services, reported sales of $268.8 million, down 56.3% from $614.6 million. As sales of ATMs decline, Swidarski told analysts he sees a growing opportunity for integrated services. "We have placed 1,000 ATMs over the course of the year, and that opens the door to us selling more services to banks," he says. Kate Monahan, an analyst with Aite Group LLC, a Boston-based consulting firm, says Diebold's emphasis on integrated services is a result of poor economy. "Diebold has significantly stepped up marketing and sales efforts around integrated-services offerings as a response to market conditions, and the company is likely to continue along this path through 2010," she says. In early morning trading, Diebold stock closed at $27.93, down $2.02 from its previous day's close of $29.95.
