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VeriFone Systems (PAY) Misses Q2 EPS by 5c; Will Undertake Strategic Review; Q3, FY16 Guidance Falls Short

June 7, 2016 4:04 PM EDT

(Updated - June 7, 2016 4:39 PM EDT)

VeriFone Systems (NYSE: PAY) reported Q2 EPS of $0.47, which was $0.05 worse than the analyst estimate of $0.52. Revenue for the quarter came in at $532 million versus the consensus estimate of $530.1 million.

“Q2 was a mixed quarter for Verifone as we grew our business, but experienced several difficult market dynamics,” said Paul Galant, Chief Executive Officer of Verifone. “As a result, it is necessary for us to adjust for these risks and update our outlook for FY16 to $2.100 billion dollars of revenue and $1.85 of earnings per share. We are aggressively executing mitigating actions including a headcount restructuring and a review of underperforming businesses. At the same time, we remain committed to executing our strategy in a disciplined manner, and continue to make progress in bringing our next generation devices to market and launching our services platform.”

Restructuring Initiatives

Verifone is currently conducting a disciplined strategic review to address underperforming businesses and reduce overall operating expense levels. In connection with these plans the company intends to reduce headcount and estimates that these activities in total will generate approximately $30 million of savings in 2017.

Guidance:

Guidance for the third fiscal quarter of 2016 is as follows:

  • Non-GAAP net revenues of $515 million
  • Non-GAAP net income per diluted share of $0.40

*** The Street sees Q3 revenue of $552 million and EPS of $0.59.

Guidance for the full fiscal year 2016 is as follows:

  • Non-GAAP net revenues of $2.100 billion
  • Non-GAAP net income per diluted share of $1.85

*** The Street sees FY16 revenue of $2.16 billion and EPS of $2.23.

For earnings history and earnings-related data on VeriFone Systems (PAY) click here.



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