Diebold won't die meekly

[Evan Daniel Ravitz <evan@xxxxxxxx>]

How can we put a stake in its heart? -Evan

(also in Businessweek)

Associated Press, 09.21.2005, 11:05 AM

Diebold Shares Fall on Lowered Forecast


Shares of Diebold Inc. plunged to a new year low Wednesday after the
company said its PRESIDENT QUIT  and it slashed its earnings forecast
for the third quarter, blaming Hurricane Katrina and rising fuel costs
along with a lower outlook for its automated teller machine business.

The North Canton company, which also makes security and voting machines,
said its president and chief operating officer quit and that Walden W.
O'Dell, Diebold's chairman and chief executive, would assume those
positions to become more involved in the company's global operations.

"Our recent financial performance has been unacceptable, and these
organizational changes are a major step toward improving our direction,"
O'Dell said.

Diebold says it now expects to make 32 to 37 cents a share for the
quarter, including restructuring charges of 7 cents a share. Analysts
surveyed by Thomson Financial had projected third-quarter earnings of 66
cents a share.

Full year earnings are expected to be between $1.90 and $2 a share,
excluding restructuring charges. The company earned $2.53 a share in
2004.

The company's shares fell $4.98, or 11 percent, to $39.39 in morning
trading on the New York Stock Exchange. The stock had previously traded
in a 52-week range between $44.31 and $57.81.

Half of the company's global revenue from ATMs is from North America,
where about $50 million in lower revenue expectations are tied to
customer delays and operational inefficiencies, O'Dell said.

The hurricane affected scheduled ATM deliveries, security installations,
maintenance contracts and other near-term business throughout the Gulf
region.

Also, the hurricane hindered deliveries of VOTING MACHINES in the Gulf
region, costing the company approximately $10 million in revenue during
the quarter.

Higher fuel prices are also pushing up costs in freight and
service-fleet operations, Diebold said. The company is starting a fuel
surcharge on certain services.

The company did not mention whether it is considering job cuts.

"We are evaluating further restructuring and other actions to improve
our performance and competitiveness beyond the current restructuring
guidance," O'Dell said.

"We will have more to report on all these efforts during the coming
months."

O'Dell is assuming the responsibilities of Eric Evans, president and
chief operating officer. Diebold said Evans is leaving the company and
has resigned from its board of directors.

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