Company financials: Diebold cuts costs as ATM orders slide

Company financials: Diebold cuts costs as ATM orders slide

Diebold says it will continue to trim costs as it attempts to claw back a $5 million shortfall in fourth quarter net income caused in part by a weakening in demand for bank ATMs in the US.

In the quarter ended December 31, Diebold reported net income of $34,925,000, or diluted $.49 per share, on revenue of $476,964,000. This compares to fourth quarter 1999 net income of $35,516,000, or diluted $.50 per share on revenue of $365,920,000.

For the 12 months ended December 31, Diebold reported net income of $136,919,000, or diluted $1.92 per share, on revenue of $1,743,608,000. For the same period in 1999, the company reported net income of $128,856,000, or diluted $1.85 per share, on revenue of $1,259,177,000.

"Although fourth quarter revenue achieved expected levels, income before taxes was approximately $5 million less than planned," says Walden O'Dell, Diebold chairman, president and chief executive officer. A weakening of US financial self-service hardware orders was a significant factor in the company's under performance, he says. "Although we were able to offset this shortfall with other business at lower margins, we were left with a $3 million gross profit impact. Additionally, currency exchange losses and investment income were each $1 million worse than expected."

Diebold recently closed one of its US plants and vows to "adjust" staffing levels at other US facilities in a bid to cut back on costs. "Throughout 2001, we will continue to improve internal efficiencies through the use of e-tools and other cost-saving technologies," vows O'Dell.

The firm says it expects demand for bank ATMs in the US to remain weak throughout the first half of 2001 and has subsequently adjusted its EPS estimate for the coming year from $2.15 - $2.20 to $1.95 - $2.07.

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