Diebold CEO steps down; issues weak guidance
NORTH CANTON, Ohio (AP) — Shares of Diebold tumbled Thursday after its chief executive stepped down and the automated teller machine company issued a weak forecast.
After 17 years at the company, the last seven as CEO, Thomas Swidarski is leaving immediately. He is forfeiting his seat on the board.
Diebold said that while progress has been made over the past several years at Diebold, the board decided a change in leadership was needed.
"The company's execution of its strategies has not been what we want or expect and we have underperformed against the opportunities in the marketplace," said Executive Chairman Henry Wallace. "This reflects the need for deeper, faster operational transformation."
Wallace, a former chief financial officer at Ford Motor Co., was appointed executive chairman on Monday. He had been on the board since 2003 and will oversee the company until a new CEO is hired.
George Mayes Jr., executive vice president of global operations, was promoted to a new position of chief operating officer and will be responsible for daily operations.
The company expects a loss from continuing operations of 12 cents per share for its fourth quarter on revenue of $840 million. After adjusting for $22 million in buyout expenses and $18 million in the resolution of a foreign corrupt practices investigation, it expects to earn 45 cents per share from continuing operations for the period.
In 2010, Diebold agreed to pay a $25 million civil penalty to settle charges in relation to the investigation.
The company's forecast is below market expectations. Analysts polled by FactSet were expecting the company to earn 64 cents per share on revenue of $846.1 million.
The company said the lower-than-expected earnings were due to a slowdown in the U.S. regional bank business and its related service work, as well as higher costs due in part to an insurance charge tied to Hurricane Sandy.
Diebold also said that it expects to earn $1.28 per share for the full year from continuing operations, or $2.07 on an adjusted basis; analysts had forecast $2.27. It anticipates revenue growth of approximately 6 percent for the year. That calculates to revenue of roughly $3 billion, meeting analyst forecasts.
Diebold said it is encouraged by the backlog in its Asia Pacific and U.S. national account segments and anticipated gains in Brazil. But it expects the U.S. regional bank business will suffer during the year. However, given the limited visibility it has on the U.S. regional bank market and the uncertain final outcome of the anticipated orders in Brazil, it has a wide range of earnings expectations.
The company said it is taking a cautious outlook for 2013. It expects its revenue will be flat and its adjusted earnings will be flat to down moderately by comparison to 2012.
Diebold, based in North Canton, Ohio, has struggled with unstable results from its overseas business. The company has cut jobs and recently suspended plans to build new corporate headquarters in order to focus on growing its business.
Shares of Diebold Inc. fell nearly 9 percent by midday Thursday, or $2.89 to $29.77 per share. Its stock is nearing the bottom of its 52-week trading range of $27.66 to $42.93.