VeriFone Systems Swings To Profit, Lowers FY Outlook - Update

(RTTNews) - Credit-card swipe machine maker VeriFone Systems Inc. (PAY), Thursday reported a swing to profit in the first quarter, reflecting higher revenues, strong margins, and lower operating costs. Earnings for the quarter came in ahead of Wall Street estimates, as did revenues.

Nevertheless, the company detailed a weak outlook for the second quarter, while lowering its full year guidance.

San Jose, California-based VeriFone reported first-quarter profit of $13.8 million or $0.12 per share, compared to a loss of $16.2 million or $0.15 per share last year.

Excluding one-time items, adjusted earnings for the quarter rose to $0.44 per share from $0.31 per share a year ago. On average, 19 analysts polled by Thomson Reuters expected earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the first quarter grew 11.5 percent to $486.2 million from $436.1 million a year ago. Adjusted revenues rose 11.4 percent to $486.9 million from $437.2 million last year. Analysts had a consensus revenue estimate of $483.37 million for the quarter.

Revenue in North America rose 31.3 percent, while Europe, Middle East and Africa dropped 2.8 percent. Latin America and Caribbean improved 3.9 percent, and Asia Pacific climbed 23.8 percent.

Gross margin for the quarter rose to 41.0 percent from 39.0 percent last year. Operating costs for the quarter dropped 0.4 percent to $176.0 million from a year ago.

Looking forward to the second quarter, the company expects adjusted revenues of $485 million to $489 million and adjusted earnings of $0.41 to $0.42 per share. Analysts currently expect earnings of $0.46 per share on revenue of $504.62 million for the quarter.

For the fiscal year 2015, the company now sees adjusted earnings of $1.78 to $1.82 per share and adjusted revenues of $1.990 billion to $2.000 billion. Analysts currently expect earnings of $1.90 per share on revenue of $2.03 billion for 2015.

Earlier, the company had projected adjusted earnings of $1.85 to $1.90 per share on adjusted revenues of $2.02 billion to $2.04 billion.

The company said its guidance reflects the impact of unfavorable foreign exchange environment and a more challenging Russian market.

PAY closed Tuesday's trading at $33.19, down $0.94 or 2.75%, on the NYSE. The stock further slipped $0.29 or 0.87%, in the after-hours trade.