VeriFone Systems Profit Misses, Cuts Outlook, Shares Plunge 27%

(RTTNews) - Shares of VeriFone Systems Inc. (PAY), Tuesday plunged 27 percent in the extended hours after the credit-card machine maker reported a weak second-quarter results and cut its full year forecast.

San Jose, California-based VeriFone's second-quarter profit plunged to $2.9 million or $0.03 per share from $17.6 million or $0.15 per share last year.

Excluding one-time items, adjusted earnings for the quarter rose to $0.47 per share from $0.44 per share a year ago. On average, 19 analysts polled by Thomson Reuters expected earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 7.4 percent to $526.3 million from $490.1 million a year ago. Analysts had a consensus revenue estimate of $530.1 million for the quarter.

Revenue in North America rose 8.4 percent, while Europe, Middle East and Africa increased 9.8 percent. Latin America was up 2.5 percent, and Asia Pacific inched up 1.2 percent.

Gross margin for the quarter narrowed to 40.0 percent from 41.6 percent last year.

"Q2 was a mixed quarter for VeriFone as we grew our business, but experienced several difficult market dynamics," said CEO Paul Galant. "We are aggressively executing mitigating actions including a headcount restructuring and a review of under-performing businesses."

For the full year 2016, the company now expects adjusted earnings of $1.85 per share and revenues of $2.10 billion. Analysts currently expect earnings of $2.23 per share on revenues of $2.16 billion for 2016.

The company earlier expected adjusted earnings of $2.21 to $2.24 per share and revenues of $2.15 billion to $2.17 billion for 2016.

Looking forward to the third quarter, VeriFone expects adjusted earnings of $0.40 per share and revenues of $515 million. Analysts currently estimate earnings of $0.59 per share and revenues of $552.1 million.

PAY closed Tuesday's trading at $28.23.56, up $0.37 or 1.33%, on the NYSE. The stock, however, plunged $7.83 or 27.74% in the after-hours trade.