Magazine article American Banker

Diebold Hitting the Road to Recovery after Series of Body Blows

Magazine article American Banker

Diebold Hitting the Road to Recovery after Series of Body Blows

Article excerpt

Diebold Inc., whose stock price and financial performance have taken a battering since early last year, is showing signs of improvement.

The North Canton, Ohio-based developer of ATM machines was among the earliest of bank technology providers to be stung by banks' preoccupation with mergers and the year-2000 problem, both of which extended the sales cycles of Diebold's products and services.

On Wednesday the company reported third-quarter revenues of $312.8 million, up 9% from a year earlier. Net income was $32.6 million, up 11% and slightly better than expected.

Its stock closed Friday at $25.375, down $1.06 for the week.

"I think they are certainly improving their business," said Matthew Wolfersberger, an analyst at McDonald Investments in Cleveland. Diebold is "progressing nicely," he said, but "risks still exist," particularly with its attempt to develop an ATM distribution network in Europe.

International Business Machines Corp. had been Diebold's distributor internationally through a joint venture called Interbold. IBM pulled out of that arrangement in 1997. Since then, Diebold has been building a distribution network of its own and hiring sales and services personnel.

Mr. Wolfersberger said that because it will take time for this effort to become as productive as the previous one, he is maintaining a "hold" rating on the stock.

Diebold also announced two acquisition deals last week.

The company said it is buying Procomp Amazonia Industria Electronica SA, a Sao Paulo, Brazil-based ATM and software developer, and Nexus Software Inc. …

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