ATM Maker Diebold 1Q Profit Falls, Cuts Jobs

Automated teller machines maker Diebold Inc. reported a sharp decline Tuesday in first-quarter earnings as it recorded a hefty charge related to a proposed settlement with federal regulators. It also plans to cut about 300 jobs, or about 1.7 percent of its work force.

While Diebold's adjusted results topped Wall Street expectations, the company also cut its full-year forecast, citing declining orders.

Its shares fell $1.14, or 4.2 percent, to close at $25.85 Tuesday after falling as low as $22.76 earlier in the session.

Net income tumbled 88 percent to $1.6 million, or 2 cents per share, for the three months ended March 31 compared with $13.8 million, or 21 cents per share, a year earlier.

Results included a $25 million charge for a deal Diebold reached with the Securities and Exchange Commission to settle civil charges related to a pending enforcement inquiry. The proposed settlement still needs final SEC approval.

Excluding the SEC charge and other items, earnings from continuing operations were 39 cents per share.

Analysts expected profit of 17 cents per share, according to a Thomson Reuters survey. Analysts' estimates typically exclude one-time items.

Sales dipped 4 percent to $663.2 million from $691.9 million as both product and service revenue declined. Analysts were looking for lower revenue of $637.5 million.

Diebold makes self-service banking devices, security systems and electronic voting machines.

It said order softness in Eastern Europe, Russia and parts of the U.S. prompted it to lower its 2009 profit and revenue outlooks.

"As the quarter progressed, the earlier weakness in orders that we had experienced in Eastern Europe, Russia and the regional bank segment of the United States became more precipitous," said Thomas W. Swidarski, president and chief executive officer.

The company now expects a 2009 adjusted profit of $1.70 to $2 per share. It previously predicted net income of $2.10 to $2.40 per share.