Pitney Bowes Shareholders Breath Sigh of Relief

Pitney Bowes Inc. (PBI) soared 10% yesterday on volume of 3.2 million shares almost touching $36, it’s biggest intra-day move since Nov. ’07 when the company plunged more than $5 after missing third quarter earnings by a wide margin. This time around, because actual earnings were feared to come in lower than expected and with the stock recently hovering near a 52-week low, all it took was a slight beat and a reiteration of full year guidance from the postage company to get the stock moving. Excluding items, Pitney Bowes beat by two cents, posting earnings of $.69 a share on revenue of $1.59 billion and reaffirmed 2008 earnings per share of between $2.80 to $2.90 on revenue growth of 6% to 9%. The only notable commentary from top management was that it again said that after concluding a strategic review of its U.S. Management Services operations, it decided to retain and grow this business, a good long term move but it does eliminate any short term catalyst for the shares. Trading at 12x P/E and with a 4.4% dividend yield, Pitney Bowes is as much a value stock as any out there and can finally claim a bottom with this earnings report. But whether there is significant upside beyond this point is another story.