VeriFone Systems, Inc. Earnings Cheat Sheet: Beats Wall Street Expectations

VeriFone Systems, Inc. (NYSE:PAY) reported net income above Wall Street’s expectations for the third 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 Third Quarter

Results: Net income for VeriFone Systems, Inc. rose to $26.3 million (28 cents per share) vs. $18.5 million (21 cents per share) in the same quarter a year earlier. This marks a rise of 42.1% from the year earlier quarter.

Revenue: Rose 21.2% to $317 million from the year earlier quarter.

Actual vs. Wall St. Expectations: PAY reported adjusted net income of 49 cents per share. By that measure, the company beat the mean estimate of 40 cents per share. It beat the average revenue estimate of $299.5 million.

Quoting Management: “With the acquisition of Hypercom, VeriFone is stronger than at any point in our 30-year history,” said Douglas G. Bergeron, Chief Executive Officer. “We will continue to aggressively grow and develop innovative services and solutions in all regions of the world,” Mr. Bergeron continued. “We are well on our way to driving significant operating synergies and gross margin expansion through the elimination of overlapping expenses and through business process re-engineering.”

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 24%, 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 five percentage points to 41.5% 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 seen net income rise in three straight quarters. In the second quarter, net income rose 24.6% and in the first quarter, the figure rose more than threefold.

The company beat estimates last quarter after being in line with expectations in the second quarter with net income of 38 cents per share.

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).

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(Source: Xignite Financials)