Deluxe Earns 75 Cents Per Share

The earnings reports are still coming in. Deluxe ($DLX) just reported adjusted quarterly earnings of 75 cents per share. Quarterly revenue dropped 0.5% to $346.3 million which was slightly better than Wall Street’s forecast. The company hed been expecting EPS to range between 66 cents and 71 cents per share. Wall Street was expecting 71 cents per share.

For the third quarter, Deluxe expects adjusted earnings of 71 cents to 77 cents per share on revenue of $353 million to $361 million.

Deluxe also raised their full-year outlook from $2.90 – $3.10 per share to $3.00 – $3.15 per share. Currently, Wall Street’s full-year forecast is at $3.03 per share.

Here are some second-quarter highlights from the earnings report:

Revenue for the quarter was $346.3 million compared to $348.0 million during the second quarter of 2010 with growth in Small Business Services partially offsetting declines in Financial Services.

Gross margin was 65.1 percent of revenue compared to 65.0 percent in 2010. Favorable impacts from price increases and the Company’s continued cost reduction initiatives were offset by increased material costs and delivery rates.

Selling, general and administrative (SG&A) expense decreased $3.2 million in the quarter compared to 2010. Increased SG&A expense associated with acquisitions, brand awareness campaigns, and investments in revenue generating initiatives were more than offset by benefits from continuing to execute against cost reduction initiatives.

Operating income in 2011 was $64.0 million compared to $63.2 million in the second quarter of 2010. Restructuring and transaction-related costs were $5.0 million in 2011 versus $2.7 million in 2010. The 2011 costs were primarily attributable to the Company’s on-going cost reduction initiatives and the April Banker’s Dashboard acquisition. Operating income was 18.5 percent of revenue compared to 18.2 percent in the prior year.

Reported diluted EPS increased $0.03 from the prior year driven by improved operating performance and a lower effective tax rate primarily from lower state taxes in 2011.

This is a very good earnings report. The stock is going for less than eight times earnings and the current dividend yield is 4.33%.

Posted by on July 28th, 2011 at 8:48 am

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