NEW YORK—Diebold Inc. releases preliminary first-quarter revenue estimates on Wednesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Wednesday will be the first time the maker of ATMs, business security systems and voting machines releases financial results since April last year as regulators have been reviewing the way the North Canton, Ohio, company reports revenue.
Since the summer of 2006, the Securities and Exchange Commission has been probing Diebold's "bill-and-hold" accounting. The practice, which the company has stopped using, refers to booking sales once a contract is signed but before the product is delivered.
Diebold said it hopes to have its accounting issues settled early in the second half of the year.
Meanwhile, investors will be awaiting the resolution of an unsolicited takeover bid by United Technologies Corp. In March, the conglomerate offered $40 per share, or about $2.6 billion, but Diebold shareholders quickly rejected the offer, saying it did not reflect the anticipated market for ATMs in the U.S.
In February, Diebold said it planned to cut about 5 percent of its work force, or roughly 800 employees, in locations in North America, Western Europe and Brazil. The company said deteriorating credit markets within the U.S. banking industry may mean fewer ATMs are needed.
BY THE NUMBERS: Diebold has not offered any guidance for the quarter. The last time it reported quarterly earnings was April 25 last year, when it said it lost $5.9 million in the first quarter due largely to charges for a plant closing in France.
ANALYST TAKE: In a note to investors in early April, Robert W. Baird analyst Reik W. Read said he expected United to raise its offer for Diebold after the company files its financial reports.
Read said Diebold is worth at least $45 per share, and said weakening credit markets do not seem to be affecting spending on ATMs. Shares closed at $38.62 on Monday.
WHATS AHEAD: Investors have been largely in the dark about Diebold's performance over the past year and will be anticipating the release of its outstanding earnings reports. The company said it hopes to begin releasing those reports after the end of the second quarter.
The performance of its much-criticized voting-machines subsidiary, Premier Election Solutions, is also likely to receive scrutiny as many states have said they are reverting to paper ballots.
STOCK PERFORMANCE: Shares of Diebold are up 30 percent in the last quarter and have lost 21 percent in the last 52 weeks.
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