VeriFone Systems Q2 Loss Narrows, Lifts FY Outlook - Update

(RTTNews) - Credit-card swipe machine maker VeriFone Systems Inc. (PAY), Thursday reported a loss for the second quarter that narrowed from a year ago, due mainly to a nine-percent revenue growth, strong margins, and lower operating costs. Adjusted earnings for the quarter came in ahead of Wall Street estimates, as did revenues. Moving ahead, the company lifted its full year outlook.

San Jose, California-based VeriFone's second-quarter loss narrowed to $23.9 million or $0.22 per share from $58.4 million or $0.54 per share in the year-ago quarter.

Excluding special items, adjusted earnings dropped to $41.6 million or $0.37 per share from $46.8 million or $0.42 per share last year. On average, thirteen analysts polled by Thomson Reuters expected earnings of $0.33 per share for the second quarter. Analysts' estimates typically exclude special items.

Net revenues for the second quarter rose 9.4 percent to $466.4 million from $426.3 million a year ago. Adjusted revenues grew 8.6 percent to $466.8 million from $429.8 million last year. Ten analysts had a consensus revenue estimate of $443.42 million for the quarter.

Revenue in North America rose 2.7 percent to $125.3 million, while Europe, Middle East and Africa rose 10.6 percent. Latin America and Caribbean inched up 0.6 percent, and Asia Pacific revenue surged 36.3 percent.

Gross margin for the quarter rose to 39.0 percent from 38.3 percent last year. Operating costs for the quarter dropped 15.7 percent from a year ago.

"I'm very pleased with our second quarter financial results, which exceeded our guidance, and the continued progress in our operational initiatives," said CEO Paul Galant. "We continue to work to drive the next evolution of commerce for our clients by becoming their most trusted partner for terminals, Payment-as-a-Service and commerce enablement solutions."

Looking forward to the third quarter, the company expect adjusted earnings of $0.33 to $0.34 per share and adjusted revenues of $455 million to $460 million. Analysts currently expect earnings of $0.37 per share on revenue of $453.83 million for the quarter.

For the fiscal year 2014, the company has now forecast adjusted earnings of $1.42 per share to $1.44 per share and revenues of $1.83 billion to $1.84 billion. Analysts currently see earnings of $1.43 per share on revenue of $1.80 billion for 2014.

Earlier, the company projected adjusted earnings of about $1.40 per share and revenues of $1.78 billion to $1.81 billion.

PAY closed Thursday's trading at $33.82, down $0.03 or 0.09%, on the NYSE. The stock, however, gained $0.90 or 2.66%, in the after-hours trade.