- Cuts FY17 guidance citing elongated conversion cycles for large orders in banking and the delay in systems rollouts in the service business
- Related stocks: PAY, NCR.
Diebold Nixdorf cuts FY17 guidance citing elongated conversion cycles for large orders in banking and the delay in systems rollouts in the service business :
Co lowers FY17 non-GAAP EPS to $0.95-1.15 from $1.40-1.70 vs. $1.58 CIQ consensus; lowers FY17 rev to $4.7-4.8 bln from $5.0 bln vs. $5.0 bln consensus.
The company is in the process of closing its books for the second quarter 2017, and expects orders, revenue ($1.10 bln) and adjusted EBITDA in the period to be comparable with first quarter results (Q2 consensus $1.13 bln).
As previously disclosed, the company's banking business is increasingly made up of large, complex projects with higher software content, resulting in a longer customer decision-making process and order-to-revenue conversion cycle. As a result, the timing and volume of orders to date leads the company to adjust its 2017 guidance.
In addition, the delay in systems rollouts also has a negative impact on the company's service business. This change in volume, combined with investments in hiring and training in the service organization as part of the company's transformation, will pressure near-term margins.
"We are encouraged by the positive feedback we are receiving from customers, which demonstrates our strong competitive position," said Andy W. Mattes, president and chief executive officer, Diebold Nixdorf. "Clearly, we are disappointed in our near-term financial performance. That said, we continue to improve our operating expenses from the prior year and are taking steps to further accelerate our cost reductions. As a result, we are increasing our DN2020 net savings target to $240 million. We are committed to realizing the full potential of our new company and delivering results for all our stakeholders."
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