Diebold Inc. was back in the black with a first-quarter profit after losing money a year ago.
The Green maker of ATMs and security systems on Tuesday slightly increased its revenue forecast for the year while reaffirming its expected earnings.
Diebold reported net income of $9.8 million, or 15 cents per share, on revenue of $688.3 million. A year ago, Diebold showed a loss of $13.4 million, or 21 cents per share, on revenue of $633.5 million.
While Diebold’s first-quarter results met analyst expectations, shares sold off Tuesday.
Shares fell $1.38, or 3.5 percent, to $37.62. Shares are up 14.9 percent including dividends since Jan. 1 and are up 29.4 percent from a year ago.
Diebold said it expects to have earnings per share of $1.30 to $1.55, up from a previous forecast of $1.25 to $1.55. Adjusted earnings are expected to be in the range of $1.65 to $1.85. Revenue is expected to grow by mid-single digits for the full year; the previous forecast was in the low-single digits.
Diebold remains in the early stages of a multiyear transformation, Andy Mattes, president and chief executive officer, said in a statement. The goal is to change Diebold largely into a service- and software-based company.
“We continued to demonstrate progress on our transformation efforts during the first quarter, generating underlying operational results in line with our own expectations,” Mattes said. “This provides us with a solid foundation on which to execute our Diebold 2.0 turnaround strategy.”
Mattes told industry analysts in a conference call that Diebold remains in the “crawl stage” and “second inning” of the long-term transformation plan.
“2014 remains a year of heavy lifting,” Mattes said. “We are no different from any other turnaround story. The low hanging fruit is typically sought after and realized first, resulting in increased savings up front.”
Mattes said Diebold will continue with its commitments, including a $150 million cost reduction program. The resulting savings are being reinvested into the business, he said.
One of those savings is what Mattes called a “major business process outsourcing” agreement with the business consulting firm Accenture that Diebold also announced on Tuesday.
The multiyear agreement involves Accenture providing Diebold with finance and accounting, human resources and what the company called procurement business process outsourcing services. The intent is to transform Diebold’s back office operations, Mattes said.
Diebold also has started an employee stock purchase program that lets employees buy company stock at a discount.
“The purpose here is to drive greater equity ownership and awareness of the company’s performance while allowing employees to benefit from the efforts put forth in our turnaround,” Mattes said.
Jim Mackinnon can be reached at 330-996-3544 or email@example.com.