VeriFone Systems Q3 Loss Widens, Adj. Earnings Top Estimates; Lifts FY View

(RTTNews) - Credit-card swipe machine maker VeriFone Systems, Inc. (PAY) Thursday reported a sharply wider loss for the third quarter, reflecting higher costs and expenses, despite 14 percent growth in revenues. However, adjusted earnings, as well as revenues topped analysts' expectations.

The company forecast fourth-quarter earnings below estimates, while lifted its full-year outlook yet again. In early June, while reporting its second-quarter results, the firm had raised its outlook for the full year. The shares rose more than 5 percent in the morning trade.

For the third quarter ended July 31, net loss attributable to stockholders significantly widened to $29.0 million or $0.26 per share from $1.9 million or $0.02 per share in the previous year.

Excluding items, adjusted earnings for the recent quarter totaled $0.40 per share, while the firm posted $0.24 per share a year ago.

On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.35 per share for the quarter. Analysts' estimates typically exclude special items.

Total net revenues climbed 14.4 percent to $475.9 million from $416 million in the preceding year. Analysts estimated revenues of $458.93 million for the quarter. Non-GAAP net revenues in the prior year was $418 million.

In North America, net revenues increased 12.1 percent, while it climbed 27.6 percent in Latin America and Caribbean, or LAC. In the Europe, Middle East and Africa, or EMEA region, revenues rose 6.9 percent, and Asia Pacific showed a revenue growth of 27.4 percent from last year.

Total operating expenses advanced 20.7 percent to $190.3 million from $157.7 million a year ago.

Gross margin as a percentage of net revenues was 38.4 percent, up from 37.3 percent a year earlier.

Looking ahead, for the fourth quarter, the company expects non-GAAP net income per share of $0.39 to $0.40, and sees non-GAAP net revenues of $478 million to $483 million.

Analysts project fourth-quarter earnings of $0.42 per share, on revenue of $470.11 million.

For fiscal year 2014, the company now expects non-GAAP net income per share to be in the range of $1.46 to $1.47, up from the prior outlook of $1.42 per share to $1.44 per share.

Non-GAAP net revenues are now anticipated to be $1.858 billion to $1.863 billion, compared to the earlier guidance of $1.83 billion to $1.84 billion.

Analysts currently expect annual earnings of $1.45 per share, on revenue of $1.83 billion.

PAY is currently trading at $36.34, up 5.21 percent.