VeriFone Systems Earnings: Here’s Why Shares Are Falling

In spite of rising revenues, VeriFone Systems Inc.’s (NYSE:PAY) profit declined in the second quarter. 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. fell to $14.5 million (13 cents per share) vs. $25.2 million (27 cents per share) a year earlier. This is a decline of 42.5% from the year-earlier quarter.

Revenue: Rose 61.4% to $472 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: VeriFone Systems Inc. fell short of the mean analyst estimate of 53 cents per share. Analysts were expecting revenue of $471.8 million.

Quoting Management: “We are very pleased with our performance, particularly the acceleration in organic growth and the increase in Hypercom-brand sales,” said Douglas G. Bergeron, Chief Executive Officer. “We remain confident in our outlook for the year. VeriFone is continuing to prove that widespread incumbency combined with market-leading innovation is a winning formula for the payments marketplace.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 40.2%, with the biggest boost coming in the most recent quarter when revenue rose 61.4% from the year earlier quarter.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 50 cents versus a mean estimate of net income of 46 cents per share.

The company reported a profit last quarter after being in the red the prior quarter. In the fourth quarter of the last fiscal year, the company booked a net loss of $198.8 million, or a loss of $2.02 per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 62 cents per share, down from 64 cents ninety days ago. For the fiscal year, the average estimate has moved down from $2.38 a share to $2.33 over the last ninety days.

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

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