PLEASANTON, Calif. (AP) -- Blackhawk Network Holdings Inc., a spinoff of supermarket operator Safeway Inc., said Thursday that its second-quarter net income fell 42 percent as operating expenses climbed and it dealt with a charge.
For the period ended June 15, the gift card and prepaid card company earned $3.4 million, or 7 cents per share. A year ago it earned $5.9 million, or 11 cents per share.
Analysts surveyed by FactSet expected earnings of 11 cents per share.
Blackhawk sells gift cards from Amazon.com, iTunes, Macy's and Starbucks to consumers, as well as prepaid reloadable cards that can be used much like debit cards but without a checking account.
The Pleasanton, Calif., company said that its results were pressured by a $3.8 million increase in an accounting charge for speeding up the expense of partner equity instruments at the time of its initial public offering. Blackhawk went public in mid-March, raising $230 million.
Adjusted income for the quarter was $8.6 million. The company did not provide adjusted per-share results.
Revenue rose 19 percent to $225.9 million from $190 million as Blackhawk made more money from fees, commissions and product sales. The company said both its program-managed Visa gift products and Cardpool exchange business had strong performances that boosted its operating revenue.
Wall Street forecast $236.9 million in revenue.
Operating expenses increased to $220.4 million from $181.1 million, reflecting higher commissions, processing, sales and general and administrative costs.
Shares of Blackhawk dropped $1.23, or 4.8 percent, to $24.50 in morning trading. Over the past year, the stock has traded between $21.37 and $27.23.
Safeway also reported a drop in its second-quarter profit, saying its results were partly hindered by a tax charge tied to a deal to sell its Canadian operations.