Diebold Inc. shares rose slightly Thursday when the company as expected reported poor third-quarter earnings and a lower outlook for the full year.
The Green maker of ATMs and security systems said it is in the end stages of eliminating 500 jobs, with fewer than 75 coming from the greater Akron area. It made a separate announcement that it had halted plans to build a $100 million headquarters elsewhere in Green.
Company executives Thursday said the job losses are taking place in North America and Brazil. Full-time, contract and open positions are being eliminated, with the process to be completed in 30 days, the company said.
These cuts are in addition to an announcement by the company earlier this year that it was moving about 200 information technology and related back office jobs to India.
About 50 full-time employees will lose their jobs in Green and nearby facilities, with another 25 coming from people working under contract and by not filling open positions, Diebold spokesman Mike Jacobsen said. The local job cuts are not concentrated in any particular departments, he said.
“Many of the job reductions have already taken place,” Jacobsen said. Employees are being offered outplacement services.
Diebold will still hire for what it considers to be key positions, Jacobsen said.
Diebold has nearly 2,000 employees in Northeast Ohio, with about 1,000 at its global headquarters in Green that straddles the Summit and Stark county line.
The company hinted at job losses when it warned on Oct. 16 that its third-quarter earnings would fall short of previously announced goals and that the company would undertake unspecified cost-cutting measures.
Shares of Diebold rose 45 cents, or 1.5 percent, to $30.81. Shares are up 4.9 percent, including dividends, since Jan. 1 and are up 1.8 percent from a year ago.
As expected, Diebold on Thursday reported net income of $17.4 million, or 27 cents per share, on revenue of $709.9 million for its third quarter. Net income was down 58.4 percent from $41.8 million, or 65 cents per share, for the same quarter in 2011. Revenue a year ago was $709.3 million.
Diebold said it expects to earn between $1.91 and $1.99 a share, down from a previous forecast of $2.31 to $2.44 a share. Revenue for the year is expected to rise 6 percent from a year ago. Earnings per share are expected to rise in 2013, the company said.
The company missed its internal projections for the quarter, Brad Richardson, executive vice president and chief financial officer, told analysts in a conference call. As a result of the missed internal forecast, the company is changing its forecasting models, he said.
The company’s revenue outlook remains intact, he said.
“We are disappointed in the results we delivered in the quarter,” Richardson said. “The fundamentals of our business remain sound.”
Thomas W. Swidarski, president and chief executive officer, said Diebold executives will be focusing on “more robust” merger and acquisition activities.
The company has new priorities for where to invest its capital resources and decided to shelve plans to build a new corporate headquarters and spend the $100 million for that project elsewhere, he said.
“While our business in the third quarter remained sound, as we generated slight revenue increases off a very strong prior-year period, our profitability was negatively affected by a number of factors,” Swidarski said in a news release. “Profit fell off considerably in Brazil, due to the year-over-year decline in the cyclical voting business there.”
The company also said it was hurt by a shift in business in North America, he said.
Diebold is addressing long-term costs by putting in a global shared services model, realigning resources and investing in service technology, Swidarski said. It also will be introducing new technology to customers in the near future, including adding a video service to existing automated teller machines, he said.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.