VeriFone Lowers Its Outlook
September 01 2016 - 6:50PM
Dow Jones News
VeriFone Systems Inc. issued a disappointing outlook for the
current quarter Thursday as the payments-technology company's
revenue missed expectations for the three months ended July,
sending shares lower.
The San Jose, Calif., company's shares, down 28% this year,
declined 14% to $17.35 in recent after-hours trading.
For the current quarter, VeriFone projected adjusted per-share
earnings of 28 cents to 29 cents and revenue of $460 million.
Analysts polled by Thomson Reuters expected per-share profit of 50
cents and revenue of $536 million.
As a result, the company also cut its guidance for the fiscal
year ending in October. VeriFone now expects adjusted per-share
earnings of $1.64 to $1.65 and revenue of $2 billion, compared with
its previous estimate for adjusted per-share profit of $1.85 and
revenue of $2.1 billion.
Chief Executive Paul Galant said the outlook for the current
quarter assumes a significantly slower rollout of new point-of-sale
devices with so-called EMV technology, which accept credit cards
with embedded computer chips.
Mr. Galant added that the company made progress toward its goal
of transforming itself to a payment- and commerce-services company
from a vendor of payment terminals in the latest quarter and that
its per-share earnings benefited from recent cost-cutting
initiatives.
For the period ended July 31, VeriFone reported a loss of $31.1
million, or 28 cents a share, up from a year-earlier profit of $9.5
million, or 8 cents a share. Excluding restructuring-related
charges and other items, adjusted per-share earnings fell to 42
cents from 47 cents.
Revenue decreased 4.3% to $488.1 million as a 12% decline in
system sales was partly offset by an 11% increase in services
revenue. Excluding certain items, adjusted revenue was $493
million.
The company expected adjusted per-share profit of 40 cents and
adjusted revenue of $515 million.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
September 01, 2016 18:35 ET (22:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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