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Verifone (PAY) Shares Hit on 43% Drop in Profits; Raised FY12 EPS Outlook Not Enough

May 24, 2012 4:40 PM
Shares of Verifone (NYSE: PAY) are getting hit in after-hours trading Thursday following the company's second-quarter 2012 results which beat on the top- and bottom-lines, but guidance that lacked some pizzazz.

Turnover at Verifone was $472.02 million, up 61.4 percent from $292.45 million in the same period last year and compared with views calling for $471.8 million. Non-GAAP net revs were $479.36 million in the period.

Net income for the electronic payment solutions giant fell 42.5 percent to $14.49 million, or 13 cents per diluted share. Adjusting for certain one-time items like stock-based compensation, amortization of intangibles, EPS rose from 58 cents per share in the same period last year to 64 cents per share. The Street was expecting EPS of 61 cents.

Gross margin expanded 200 basis points to 45 percent on an adjusted basis.

For its third quarter, Verifone is looking for non-GAAP EPS of 68 cents to 70 cents and sales of $495 million to $500 million, compared with views expecting EPS of 70 cents and revs of 502.2 million.

Fiscal 2012 EPS should be $2.60 to $2.66 with revs of $1.90 billion to $1.925 billion, both a little sluggish when compared with analyst expectations calling for EPS of $2.66 and revs of $1.92 billion. Verifone last saw fiscal 2012 EPS of $2.60 to $2.63 and revs of $1.900 billion to $1.930 billion.

Shares are down 7.7 percent in late trading Thursday.

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Earnings