VeriFone Systems Inc. Earnings: Short on Profit Estimate, Stock Crashes 10%

VeriFone Systems Inc. (NYSE:PAY) reported higher profit for the third quarter as revenue showed growth. VeriFone designs, markets, and services transaction automation systems that enable secure electronic payments among consumers, merchants, and financial institutions.

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VeriFone Systems Inc. Earnings Cheat Sheet

Results: Net income for VeriFone Systems Inc. rose to $37.7 million (34 cents per share) vs. $26.3 million (28 cents per share) in the same quarter a year earlier. This marks a rise of 43.1% from the year-earlier quarter.

Revenue: Rose 54.3% to $489.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: VeriFone Systems Inc. fell short of the mean analyst estimate of 62 cents per share. It beat the average revenue estimate of $471.8 million.

Quoting Management: “We are very proud of our performance in Q3. Despite continued volatility around exchange rates, our business remains vibrant in all geographies,” said Douglas G. Bergeron, Chief Executive Officer. “In the U.S., growth accelerated as we saw the beginnings of the adoption of EMV-based systems and the first significant payments services deals in the quarter. We are excited about our prospects for 2013 and beyond.”

Key Stats:

For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 46.7%, with the biggest boost coming in the second quarter when revenue rose 61.4% from the year earlier quarter.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the second quarter, it topped the mark by one cent, and in the first quarter, it was ahead by 4 cents.

Margins increased in the second quarter after dropping the quarter before. Gross margin grew 0.9 percentage point from the year-earlier quarter to 42.4%. In the first quarter, the figure rose 1.2 percentage points to 40.7% from the year earlier quarter.

Looking Forward: Expectations for the company’s next-quarter results are lower than they have been. Over the past sixty days, the average estimate for fourth quarter has fallen from 68 cents per share to 65 cents. For the fiscal year, the average estimate has moved down from $2.33 a share to $2.32 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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