NORTH CANTON, Ohio (AP) — Sagging performance and mounting legal costs in its electronic-voting segment kept third-quarter earnings nearly flat at Diebold Inc., the company said yesterday.
For the three months ending Sept. 30, the maker of automated teller machines and security and voting equipment earned $48.3 million, or 67 cents per share, on sales of $613.4 million.
Analysts surveyed by Thomson First Call had expected earnings of 68 cents per share.
A year earlier, Diebold had reported third-quarter earnings of just under $48.3 million, or 66 cents per share, on sales of $570.2 million.
Diebold shares fell 91 cents, or 2 percent, to close at $45.70 yesterday on the New York Stock Exchange — toward the lower end of their 52-week range of $43.88 to $57.43.
Walden W. O’Dell, Diebold chairman and chief executive officer, said election-systems issues in California “had a negative impact on earnings and margins during the third quarter. However, we expect that the modernizing of voting systems in the United States will continue in 2005 and beyond, and we should have better visibility of the direction of the U.S. election-systems market after the November election.”
The company has said it is determined to stay in the electronic-voting market, which is about 5 percent of its business.
Revenue from election systems was $34.4 million, down 28 percent from the $47.9 million recorded last year. Diebold reported the election-systems business reduced earnings by 4 cents per share in the third quarter; election systems added 6 cents per share in the year-ago quarter.
Excluding the election-systems business, Diebold’s third quarter earnings per share would have increased by 18.3 percent.
Last week, Diebold said growing legal costs over its electronic voting equipment forced it to reduce its third-quarter earnings forecast of 70 cents to 74 cents a share to 67 cents.
A lawsuit filed in California claims that Diebold equipment exposed California elections to hackers and software bugs. Some lawmakers and others have expressing doubts about the integrity of paperless touch-screen voting terminals.
For the first nine months of the year, Diebold earned $121.2 million, or $1.67 per share, on sales of nearly $1.66 billion. For the same period in 2003, earnings were $115.5 million, or $1.59 per share, on revenue of $1.46 billion.
Diebold has more than 13,000 employees internationally. It had revenue of $2.1 billion in 2003.
Please read our comment policy before commenting.