Revenue declined driven by lower license and service revenues, but was partially offset by growth in SaaS and data revenues. The decline in license revenue was primarily in Location Intelligence and Customer Information Management and partially offset by growth in Customer Engagement Solutions. The indirect channel continued to show growth. EBIT margin decreased from prior year largely driven by the lower revenue.
Results included a full quarter of revenue from Newgistics. Newgistics exceeded expectations on volumes processed in the quarter and delivered strong revenue growth over its prior year results.
Excluding Newgistics, the segment continued to generate double-digit revenue growth, which was driven by strong performance in both cross border retail and marketplace volumes along with domestic shipping. The domestic shipping increase is driven by Complete™ Delivery, which is an end-to-end carrier service enabled by the Company’s shipping API’s. EBIT margin declined from prior year largely due to investments in market growth opportunities as well as the amortization of acquisition-related intangible assets.
The Company expects for the full year 2018:
- Revenue, on a constant currency basis, to be in the range of 9 percent to 13 percent growth, when compared to 2017.
- Adjusted EPS to be in the range of $1.40 to $1.55.
- Free cash flow to be in the range of $350 million to $400 million.
As a result of the Tax Legislation, the Company expects its annual tax rate on adjusted earnings to be in the range of 23 percent to 27 percent, or relatively flat to 2017. In addition to the lower tax rate, the Company also expects to repatriate cash and will use the cash to pay down debt.
The impact of Tax Legislation consists of preliminary estimates and is subject to change. Information regarding the impact of Tax Legislation is based on current calculations and interpretations, as well as assumptions and expectations relating to Tax Legislation, which are subject to further guidance and change.
This guidance discusses future results, which are inherently subject to unforeseen risks and developments. As such, discussions about the business outlook should be read in the context of an uncertain future, as well as the risk factors identified in the safe harbor language at the end of this release and as more fully outlined in the Company's 2016 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission.
This guidance excludes any unusual items that may occur or additional portfolio or restructuring actions, not specifically identified, as the Company implements plans to further streamline its operations and reduce costs. Revenue guidance is provided on a constant currency basis. The Company cannot reasonably predict the impact that future changes in currency exchange rates will have on revenue and net income. Additionally, the Company cannot provide GAAP EPS and GAAP cash from operations guidance due to the uncertainty of future potential restructurings, goodwill and asset write-downs, unusual tax settlements or payments and contributions to its pension funds, acquisitions, divestitures and other potential adjustments, which could (individually or in the aggregate) have a material impact on the Company’s performance. The Company’s guidance is based on an assumption that the global economy and foreign exchange markets in 2018 will not change significantly.
Review of Strategic Alternatives
The Pitney Bowes Board of Directors, together with management, continues to explore and evaluate strategic alternatives to further enhance shareholder value. The Board has not set a timetable for the process nor has it made any decisions related to any strategic alternatives at this time. There can be no assurance that the exploration of strategic alternatives will result in any particular outcome. The Company does not intend to provide updates unless or until it determines that further disclosure is appropriate or necessary.
Conference Call and Webcast
Management of Pitney Bowes will discuss the Company’s results in a broadcast over the Internet today at 8:00 a.m. ET. Instructions for listening to the earnings results via the Web are available on the Investor Relations page of the Company’s web site at www.pitneybowes.com.
About Pitney Bowes
Pitney Bowes (NYSE:
PBI) is a global technology company powering billions
of transactions – physical and digital – in the connected and borderless
world of commerce. Clients around the world, including 90 percent of the
Fortune 500, rely on products, solutions, services and data from Pitney
Bowes in the areas of customer information management, location
intelligence, customer engagement, shipping, mailing, and global
ecommerce. And with the innovative Pitney Bowes Commerce Cloud, clients
can access the broad range of Pitney Bowes solutions, analytics, and
APIs to drive commerce. For additional information visit Pitney Bowes,
the Craftsmen of Commerce, at