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Why Diebold Nixdorf Inc. Stock Plunged Today

What happened

Shares of Diebold Nixdorf Inc. (NYSE: DBD) were down 19.6% as of 11 a.m. EDT Wednesday after the ATM and POS solutions specialist reduced its 2017 revenue and earnings outlook.

So what

Diebold now expects full-year 2017 revenue in the range of $4.7 billion to $4.8 billion, down from previous guidance for $5 billion to $5.1 billion. On the bottom line, that should translated to a GAAP loss per share of $1.65 to $1.45 (compared to a GAAP loss per share of $0.70 to $0.40 previously), and adjusted (non-GAAP) earnings per share of $0.95 to $1.15 (down from prior guidance for adjusted EPS of $1.40 to $1.70).

Diebold blamed its new forecast on its banking business, which "is increasingly made up of large, complex products with higher software content, resulting in a longer customer decision-making process and order-to-revenue conversion cycle." Consequently, these delays also hurt volumes in Diebold's service business, and will mean margin headwinds in the meantime.

IMAGE SOURCE: DIEBOLD NIXDORF.

Now what

On a more encouraging note, CEO Andy Mattes remarked that the company is taking steps to accelerate cost reductions. Specifically, Diebold is increasing its net savings target under its multiyear business-integration and cost-savings program (dubbed DN2020) by $40 million, to $240 million. 

But that's little consolation to impatient investors as they watch Diebold's margins come under pressure in the near term. While Diebold's long-term story appears to remain intact, our market hates being told to effectively "hurry up and wait." So it's no surprise to see Diebold shares falling hard on today's news.

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Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.