Pitney Bowes Raises Outlook as Profit Growth Accelerates
Adjusted free cash flow climbed 39% to $148 million in the second quarter.
Pitney Bowes Inc. (PBI), the shipping and mailing technology company, reported faster second-quarter profit growth as cost reductions at SendTech offset continued pressure in Presort, lifting adjusted earnings 59% to $0.43 a share.
The quarter extended a widening split between the two businesses. SendTech generated $123 million of adjusted segment EBIT, up 21% from a year earlier, while Presort produced $20 million, down 44%. Combined reportable-segment EBIT increased 4% to $143 million.
Revenue fell 2% to $451 million, a narrower decline than 3% in the first quarter and 7% in the fourth quarter of 2024. Adjusted EBIT rose 13% to $116 million, accelerating from 9% growth in the prior quarter. GAAP net income increased 66% to $50 million, and diluted earnings more than doubled to $0.36 a share.
SendTech revenue declined 1% to $309 million, matching the first-quarter rate of contraction. Adjusted segment EBITDA rose 17% to $133 million as operating expenses fell $14 million and the business received a $5 million tariff refund. Those gains expanded the adjusted EBITDA margin to about 42.9% from 36.2% a year earlier.
Presort revenue fell 5% to $143 million even as the decline in mail volume moderated for a third consecutive quarter. Volume decreased 3% to 3.3 billion pieces, compared with a 6% decline in the first quarter and 10% in the fourth quarter. Lower volume and higher fuel and transportation costs compressed the segment’s adjusted EBITDA margin to about 20.2% from 30.0% a year earlier.
Cash generation strengthened despite the revenue decline. Adjusted free cash flow rose from $106 million a year earlier and more than tripled from $44 million in the first quarter, while cash from operations increased 37% to $153 million.
Pitney Bowes now expects 2024 adjusted EBIT of $445 million to $475 million, raising both ends of its previous range. Adjusted EPS guidance increased to $1.55 to $1.70 a share, and adjusted free-cash-flow guidance rose to $360 million to $410 million. The company maintained its revenue forecast of $1.80 billion to $1.86 billion.
The company reduced debt by $201 million from the end of the first quarter through July 29 and eliminated $347 million of notes due in March 2027, leaving March 2029 as its next maturity. Pitney Bowes also repurchased 4.5 million shares for $53 million during the quarter, slowing from 12.9 million shares for $136 million in the first quarter.