P.O. woes delivered to Pitney Bowes doorstep
Pitney Bowes Inc. was buffeted by uncertainty in the third quarter as the U.S. Postal Service blamed lower mail volumes for the widespread closure of post offices, and as the financial sector hesitated with the ongoing worldwide debt crisis.
Stamford-based Pitney Bowes sells mail systems and runs corporate mailrooms on an outsourced basis, employing 30,700 people in more than 100 countries.
The company has been working successfully the past several years to increase revenue from a widening array of digital communication offerings, including Volly, an online service allowing companies to let customers view and pay bills online, among other tasks. Pitney Bowes is planning to begin actively marketing the service to consumers early next year.
In September, Software Magazine ranked Pitney Bowes the 134th largest provider of software and related services.
Pitney Bowes more than doubled profits in the third quarter to $173 million, despite revenue tailing off 3 percent from a year ago to just under $1.3 billion, thanks in part to a restructuring effort that commenced in 2008.
In an early-November conference call with investment analysts, CEO Murray Martin did not rule out the possibility of Pitney Bowes making additional cost cuts, without specifying whether that could include layoffs.
“There was a lot of discussion about the Postal Service which affected our core business in the quarter,” Martin said. “That has really started to die down as a hot topic in the media, but it definitely had some impact in the quarter ”¦ The concern of customers in misreading the communication as to the viability of the Postal Service and its ability to survive were main items that customers were discussing, and they wanted clarity before signing into long-term contracts.
“The Postal Service is now beginning to start to talk positively about mail, and is starting to actually put advertising and marketing out about the value of mail and different programs to stimulate mail,” Martin added. “So I think we”™ll start to see a ”¦ more positive feel about mail.”
In early November, U.S. Sen. Joe Lieberman unveiled the 21st Century Postal Service Act, which the Stamford resident said would save the agency and put it on the road to financial stability. Among other measures, the bill would authorize employee buyouts to help the Postal Service cut its workforce by 100,000 positions in three years and allow the service to amortize pension benefits over time, with a previous law having ordered the Postal Service to reserve those funds up front, contributing to its near-insolvency.
During the quarter, former Pitney Bowes CEO Michael Critelli addressed the U.S. Postal Service”™s woes in an entry to his “Open Mike” blog.
“The Postal Service has failed to educate its huge small business base on the e-commerce opportunities available from marketing over a longer distance,” Critelli stated. “Businesses often miss opportunities to market their services directly to consumers far removed from their local ”¦ area, simply because they do not know how to market their products and services remotely. The Postal (Service) has also failed to help businesses that normally do not use the mail start to grow their business through highly targeted direct mail marketing.”