VeriFone posts loss on charges but tops targets

VeriFone Systems slides to $1.9M loss on special items; adjusted profit beats expectations

Associated Press

SAN JOSE, Calif. (AP) -- VeriFone Systems Inc., which makes terminals for electronic payments, said Thursday that it flipped to a loss in the third quarter as revenue dropped 15 percent and costs rose.

Excluding acquisition and other costs, the results were still down sharply from a year ago, but still beat Wall Street expectations.

The shares ended regular trading up 44 cents, or 2.2 percent, to $20.72. In after-hours trading, they were up another 97 cents, or 4.7 percent, to $21.69. They hit a 52-week low $15.34 in June after peaking at $36.13 in January.

For the fourth quarter, which ends in October, the company predicted earnings after special items would be 25 cents per share — matching analysts' expectations — on revenue of $418 million to $422 million, which would top expectations of $411.8 million.

VeriFone said the first quarter of fiscal 2014 should show "modest" growth over the October-quarter results.

For the July quarter, the loss was $1.9 million, or 2 cents per share, and compared with year-ago net income of $37.7 million, or 34 cents per share.

The company said that excluding expenses related to acquisition and stock-based compensation, it would have earned 24 cents per share, compared with 75 cents per share on the same basis a year earlier. Analysts, who usually exclude such items, had expected earnings of 20 cents per share, according to a FactSet survey.

Revenue fell to $416 million from $489 million a year earlier. Analysts had predicted $400.4 million.

Operating expenses increased $6.3 million, or 4 percent, to $157.7 million.

The company acquired ENZ, a payment-service business in New Zealand.

Earlier this year, the company said it had failed to tailor products to the needs of merchants and the sales staff was underperforming. The longtime CEO, Douglas Bergeron, stepped down and was replaced on an interim basis by Chairman Richard McGinn, who remains in that role.

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