VeriFone Holdings Earnings Cheat Sheet: Double-Digit Profit and Revenue Growth

VeriFone Systems, Inc. (NYSE:PAY) reported net income above Wall Street’s expectations for the second quarter. The Company designs, markets, and services transaction automation systems that enable secure electronic payments among consumers, merchants, and financial institutions.

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VeriFone Systems Earnings Cheat Sheet for the Second Quarter

Results: Net income for VeriFone Systems, Inc. rose to $25.2 million (27 cents/share) vs. $20.2 million (23 cents/share) in the same quarter a year earlier. A rise of 24.6% from the year earlier quarter.

Revenue: Rose 21.5% to $292.4 million YoY.

Actual vs. Wall St. Expectations: PAY reported adjusted net income of of 46 cents/share. By that measure, the company beat the mean estimate of 43 cents/share. Estimates ranged from 42 cents per share to 45 cents per share. It beat the average revenue estimate of $285.4 million.

Quoting Management: “We are very pleased with VeriFone’s second quarter results,” said Douglas G. Bergeron, Chief Executive Officer. “For the sixth straight quarter, revenue reached an all-time high, with growth once again exceeding 20%. Gross margins and operating margins continued to expand, highlighting the strength of our services-driven strategy.” Bergeron added, “We have become the critical enablers of payment security, payment-enabled media, and smartphone-based payment at the point of sale, and together with our industry partners we are reshaping the future of payments.”

Key Stats:

The company has enjoyed double-digit year-over-year revenue growth for the past five quarters. Over that span, the company has averaged growth of 23.7%, with the biggest boost coming in the first quarter when revenue rose 27% from the year earlier quarter.

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 4.9 percentage points to 41.9% from the year earlier quarter. Over that span, margins have grown on average 3.5 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 1 cent in first quarter and by 3 cents in fourth quarter of the last fiscal year.

Competitors to Watch: Hypercom Corporation (NYSE:HYC), NCR Corporation (NYSE:NCR), Radiant Systems, Inc. (NASDAQ:RADS), MICROS Systems, Inc. (NASDAQ:MCRS), USA Technologies, Inc. (NASDAQ:USAT), PAR Technology Corporation (NYSE:PAR), Pitney Bowes Inc. (NYSE:PBI), Diebold (NYSE:DBD), Coinstar (NASDAQ:CSTR), DELL (NASDAQ:DELL), Hewlett-Packard (NYSE:HPQ), IBM (NYSE:IBM).

Stock Performance: Shares of PAY are up 1.62% from the previous close.

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(Sources: YahooFinance, Xignite Financials)