Plan clears the path for higher profits

Article Excerpt

DIEBOLD, INC. $43 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) is a leading maker of automated teller machines (ATMs). It also makes electronic security systems for businesses and government agencies. Revenues grew from $1.8 billion in 2001 to $2.6 billion in 2005. Profits before unusual items rose from $1.96 a share (total $140.5 million) in 2001 to $2.54 a share ($184.0 million) in 2004. However, rising interest rates have hurt demand for loans, and many banks have put off buying new ATMs. Rising costs of raw materials like steel and copper have also squeezed Diebold’s profits. Consequently, profits in 2005 fell to $1.92 a share ($136.3 million). Diebold aims to improve its long-term profits with a major restructuring plan, including a new company-wide computer system to streamline purchasing and cut inventory costs. It’s also shifting some production from France to Eastern Europe, as banks in that region expand their ATM networks. Most of the benefits will come…

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