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Stocks Fall for Diebold, NCR; Diebold Cuts Its Earnings Expectations

Posted on: Thursday, 22 September 2005, 21:00 CDT

DAYTON -- The stock of Diebold Inc. and NCR Corp., major rivals in making and selling automated teller machines, fell on Wednesday after Diebold cut its earnings expectations and said its ATM unit's revenue would be more than $50 million short of targets for this quarter.

Diebold's (NYSE:DBD) stock plunged 15.5 percent to $37.47, down by $6.90 per share. Its previous low share price during the past year had been $44.31. Trading volume on Wednesday was 6.1 million shares, compared with the normal 577,500.

Diebold reduced its earnings forecast for the third quarter to 25 cents to 30 cents per share, excluding restructuring and manufacturing startup costs, down from the prior targets of 62 cents to 67 cents. It reduced its earnings forecast for all of this year to $1.90 to $2, down from the prior $2.60 to $2.70. Diebold's new and old estimates for 2005 also exclude the restructuring and other one-time expenses.

The company said revenue from its financial self-service unit is expected to be more than $50 million lower than expectations this quarter because of weak ATM sales to regional banks, mostly in North America. That segment of the market represents the majority of Diebold's ATM sales in North America, the company said.

Diebold, based in North Canton, shook up its senior management -- including its ATM business supervision -- and said goodbye to president and chief operating officer Eric Evans, who is departing and has resigned from Diebold's board.

The company said it would focus on getting new products to the market more quickly and improving profit margins and customer satisfaction. Diebold also makes security systems and voting machines.

NCR's (NYSE:NCR) stock fell 5.2 percent, by $1.66, to $30.10. The 52-week range is $24.19 to $39.84. Trading volume was 5 million shares, compared with the average of 1.3 million.

NCR will not comment on any aspect of its business now because it is in a quiet period until the Oct. 25 announcement of its third- quarter earnings, spokesman John Hourigan said.

But Diebold, which announces its third-quarter earnings only a day later on Oct. 26, spoke with analysts and issued news releases about its revamped plans.

"I'm extremely disappointed with our performance during the third quarter, and in our significantly lowered outlook for the remainder of the year," said Walden O'Dell, Diebold's chairman and CEO.

ATM manufacturers had anticipated a bigger pickup in sales this year, industry officials and observers have said. Instead, many banks have preferred to upgrade older ATM machines and delay purchases of the new machines.

Despite the ATM sales slump in North America, global markets remain healthy, O'Dell told analysts on Wednesday.

Contact John Nolan at 225-2242.

Source: Dayton Daily News

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