Successes of Diebold's Security Business Flattened by Other Divisions

NORTH CANTON, Ohio -- Diebold Inc. on Wednesday reported flat third-quarter earnings, saying gains made by the strong performance of its financial self-service and security businesses were offset by poor performance in its election systems business.

The company, which makes and sells self-service delivery and security systems, said quarterly income was $48.3 million, or 67 cents a share, compared with $48.3 million, or 66 cents a share, last year. The latest quarter include costs for product recertification as well as legal and other expenses related to a pending civil action, which together hurt earnings by 5 cents a share. Analysts surveyed by Thomson First Call expected Diebold to report earnings of 67 cents a share.

Revenue grew 7.6 percent to $613.4 million from $570.2 million a year ago -- or 6.4 percent on a fixed exchange rate basis. Financial self-service revenue rose 8.6 percent for the quarter, and security solutions revenue grew 17 percent -- or 7 percent and 16.9 percent on a fixed exchange rate basis, respectively.

Diebold said its election systems business hurt earnings in the latest quarter by 4 cents a share, but was accretive to year-ago profit by 6 cents.

The company expects to report earnings of 87 cents to 92 cents a share, on a revenue increase of 9 percent to 11 percent on a fixed exchange rate basis, for the fourth quarter. For the year, Diebold anticipates earnings of $2.54 to $2.59 a share, on revenue growth of 11 percent to 12 percent, giving effect to a fixed exchange rate. Analysts currently expect the company to post earnings of 90 cents a share for the quarter, and $2.57 for 2004.

For 2005, Diebold expects earnings per share to rise 18 percent to 20 percent on revenue growth of 10 percent to 12 percent. Analysts anticipate earnings of $3.08 a share for 2005.