VeriFone Posts Loss, But Tops Estimates; Outlook Strong

(RTTNews) - Credit card swipe machine maker VeriFone Systems Inc. (PAY), Thursday reported a slip to loss for the third quarter, as revenue dropped across all geographies, with margins under pressure, partly on litigation loss contingency expense.

Excluding items, the company reported a profit that topped Wall Street estimates with revenues exceeding expectations. VeriFone also provided a strong outlook for the current quarter.

Shares of the company gained 3 percent in after-hours trade on the New York Stock Exchange.

VeriFone, based in San Jose, California, reported a third-quarter net loss to stockholders of $2 million or $0.02 per share, compared with net income of about $38 million or $0.34 per share last year.

Excluding items, adjusted earnings for the quarter were $0.24 per share, compared with $0.75 per share in the prior year.

On average, 17 analysts polled by Thomson Reuters expected earnings of $0.20 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the third quarter slipped 15 percent to $416 million from $489 million a year ago, and adjusted revenue dropped to $418 million from $493 million last year. Analysts expected revenue of $400.83 million for the quarter.

Among regions, revenue in Europe, Middle East and Africa dropped 11 percent and Latin America and Caribbean 26 percent. Asia Pacific revenue fell 7 percent and North America slipped 16 percent.

The company has been persistently battling tough business conditions in Europe and other regions, while it continued to accelerate payment-as-a-service offering in the Nordics, New Zealand, U.S. and Australia.

Results were also impacted by gross margin which receded to 37.3 percent from 42.4 percent last year. Operating expenses for the quarter jumped 4 percent to about $158 million.

For the fourth quarter, VeriFone expects adjusted earnings of $0.25 per share and adjusted revenue of about $418 million to $422 million. Analysts currently expect earnings of $0.25 per share on revenue of $411.85 million.

The company expects the first fiscal quarter of 2014 to reflect modest sequential improvement to the Q4 guidance.

Shares of VeriFone closed Thursday at $20.73, up $0.45 or 2.22%, on a volume of 3.3 million shares on the NYSE. In after hours, the stock gained $0.68 or 3.28%. Over the past 52-week period, the stock trended in the range of $15.34 - $36.13.