VeriFone Swings into Loss in Q2, Provides Downbeat Q3 Guidance (PAY)
VeriFone Systems Inc. (NYSE: PAY) reported late on Wednesday that it swung into fiscal second quarter loss as the bottom line was weighed by litigation charges. The electronic payment solutions provider also provided very downbeat guidance for the fiscal third quarter. Shares were hammered in aftermarket hours.
The Company said that sales in most markets fell in the recently concluded quarter. VeriFone Systems now plans to introduce more products.
For the fiscal second quarter ended April 30, the San Jose, California-based Company reported a loss of $58.4 million or 54 cents a share compared to a profit of $3.5 million or 3 cents a share, in the year-earlier quarter. In the recently concluded quarter VeriFone said it set aside $69 million or 44 cents a share to cover possible litigation charges.
Stripping out onetime items, adjusted earnings fell to 42 cents a share from 64 cents a share, in the same quarter of last year. Revenue plunged 9.7% to $426.3 million. After excluding deferred revenue and other adjustments, revenue fell 10% to 430 million.
Earlier in March, the Company projected earnings of 45 cents to 50 cents a share on adjusted revenue of $435 million to $450 million.
Analysts’ consensus estimate was for earnings of 47 cents a share on revenue of $440 million.
Gross margin contracted to 36.2% from 40.7% while operating expenses soared 29% with research and developments costs increasing 9.9%.
System solutions sales, which generate bulk of the revenue, fell 19%. Revenue from services increased 14%.
For the current quarter, the Company expects adjusted earnings of 20 cents a share on adjusted revenue of $400 million. Analysts polled by Thomson Reuters were expecting earnings of 50 cents a share on adjusted revenue of $461 million.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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