Peter Sakon: Yes, the international portion of GEC.
Marc Lautenbach: Is it worth keeping? It depends a little bit on what you could fetch on the outside market. It’s still positive from a gross margin perspective. I would say, as witnessed with the cross-border business and globally if it’s worth more to somebody else than it is to us, then we would certainly consider any serious offer. So, our intend is all those businesses to contribute positively to the P&L going forward. I will say as you think about the business going forward, and the reason we’re so fixated on the Domestic Parcel margins is that’s where most of the appreciation comes from in the next couple of years.
Peter Sakon: Thank you for your time.
Operator: Your next question comes from the line of Alek Valero from Loop Capital. Please go ahead.
Alek Valero: Hey, how’s it going guys? It’s Alek, I’m on for Ananda. So my question is regarding the December quarter. Maybe if you guys could provide a bit more color on to what extent macro impacted the December quarter relative to where Street expectations were at? Was it a little bit more macro focus or was Street just too high? Thank you.
Marc Lautenbach: I don’t think the Street was too high. I mean, as I said, we had higher expectations for the business. The principal variance was in Global Ecommerce and it was in those two line items I mentioned. One was revenue per piece in weeks 49, 50, and 51 was a little bit less than we thought. That cost us about $5 million and transportation costs well, they improved meaningfully year-to-year, that would also improve meaningfully quarter-to-quarter. So, we said north of 20% improvement year-to-year was also about the same quarter-to-quarter. We are expecting another probably $5 million of benefit there. So those two together were $10 million of EBIT that’s kind of €“ that more than closes the $0.02 to the Street.
Alek Valero: Awesome. That was helpful. Thanks so much for that. And the second question, if I may. So, given your guidance of having EBIT outpaced revenue growth, you mentioned that was primarily €“ that’s going to primarily be driven by Global Ecommerce. So, do you guys expect Global Ecommerce to be profitable in 2023?
Marc Lautenbach: To be EBITDA profitable in 2023?
Alek Valero: Yes.
Marc Lautenbach: I mean think about this way. I mean, so it was from an EBITDA perspective last year, so EBITDA positive right there is $20 million to $25 million of improvement. We expect more than that, but that’s just kind of the basic math. But you’ve got some headwinds of interest expense and other things that you’re running against.
Alek Valero: Got it. Got it. For sure. Thanks so much for that.
Operator: And at this time, there are no further questions. I’ll turn it back to you for any closing remarks.
Marc Lautenbach: Thanks. So, listen last to unpack about the quarter. I do miss if I didn’t. And by thanking the Pitney Bowes team, I am continued to be pleased and impressed with people’s commitment to this business. You saw it in our distribution centers where we have lots of volunteers to help in the middle of peak and not just first or second shift and not just in the good cities, but all over and third shift and that’s a true sign of folks dedication to this business and to moving forward. So, as I said, our headline for the quarter is, we made lots of good progress across many different dimensions in Global Ecommerce, we’re expecting to touch more. SendTech and Presort continue to be and we expect that to continue. So, as we move into 2023 there’s lots of different currents running through the economy.
We’re a little more cautious about how we call the year. We’ve got much more focus on providing flexibility to accommodate different things that may happen in the environment. That being said, our focus continues to be as we get out of this economic moment and get to more calm waters how this business is positioned and continue to wipe our hand. We will certainly look at any strategic options that present themselves along the way, but I like how we’re positioned. So, thanks for your time this morning, and we’ll talk soon.
Operator: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.
