Aug. 5--Diebold Inc. made a better-than-expected profit for the second quarter, but ratcheted down slightly its earnings outlook for the year.

The Green company, which makes automated teller machines and is expanding its services business, made $30.6 million, or 46 cents a share, on revenue of $700.5 million for the quarter ending June 30. Income was up 5 percent from a year ago, when it reported making $27.2 million, or 41 cents per share. Revenue was down 9 percent from the second quarter of 2008.

The company did better than its internal earnings projections, Tom Swidarski, president and chief executive officer, said in a conference call with investors on Tuesday.

"There are signs that the market has bottomed out and is beginning to stabilize," Swidarski said in a prepared statement. "For the remainder of this year, however, we don't expect any significant rebound in demand as spending remains tight with our financial cus tomers."

Spending levels by customers "remained well below norm," he told investors. Swidarski said he did not expect a significant rebound in business in Europe or with U.S. regional banks. Diebold had stronger than expected performance in Asia, particularly in China, he said.

Industry analysts had expected Diebold to report making 33 cents per share. Revenue, while down from a year ago, also exceeded consensus expectations.

Shares rose 10.3 percent, or $2.91, to $31.28. Shares are up 13.7 percent, including reinvested dividends, since Jan. 1 and are down 11.5 percent from a year ago.

Diebold said it expects to make $1.34 to $1.52 per share based on generally accepted accounting principles, or $1.70 to $1.90 on a non-GAAP basis for 2009. Diebold previously said it expected to make $1.33 to $1.60 a share, or between $1.70 and $2 on a non-GAAP basis.

"We continue to experience a tough environment with our core financial markets," Leslie Pierce, vice president and interim chief financial officer, told investors. "This is having a strong negative effect on our security business."

Diebold's security revenue will decline 11 to 19 percent this year, while the company expects revenue in its other business segments to be essentially flat for the rest of 2009, Pierce said. Total revenue is expected to fall between 7 percent and 11 percent, she said.

In addition to making and servicing ATMs, Diebold also makes and services security systems and electronic voting machines; the company is increasingly emphasizing providing services to the banking and financial services industries.

Company executives are evaluating the organizational structure, Swidarski said.

"The financial industry is changing rapidly and we must transform our organizational strategies to position ourselves for future success," he said.

Also, the search for a new chief financial officer is progressing with "a number of strong candidates" interviewed, Swidarski said.

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