VeriFone Systems Inc. (PAY: Quote) said Thursday after the markets closed that its second quarter profit fell 43% from last year as higher costs and expenses more than offset a 61% increase in revenue.
However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue.
At the same time, the San Jose, California-based electronic payment technology company gave a weak forecast for the third quarter, and maintained its outlook for the full fiscal year.
"We are very pleased with our performance, particularly the acceleration in organic growth and the increase in Hypercom-brand sales," said Douglas Bergeron, VeriFone Chief Executive Officer. "We remain confident in our outlook for the year."
VeriFone shares are currently losing 9.44% in after hours trading after closing the regular trading session at $45.00, down $1.70 or 3.64%. The shares trade in a range of $30.25 to $55.89.
VeriFone, which makes credit card payment terminals, has of late resorted to acquisitions to expand its product offerings and geographic reach. The company completed its $485 million acquisition of Hypercom Corp. in August 2011. On December 30, 2011, VeriFone completed the acquisition of Point, Northern Europe's largest provider of payment and gateway services and solutions for retailers, for about EUR 600 million.
For the second quarter ended April 30, 2012, VeriFone reported net income of $14.5 million or $0.13 per share, compared to $25.2 million or $0.27 per share for the year-ago quarter.
Excluding items, adjusted net income for the second quarter was $71.4 million or $0.64 per share, compared to $42.9 million or $0.46 per share in the prior year quarter.
On average, 11 analysts polled by Thomson Reuters expected the company to earn $0.61 per share for the second quarter. Analysts' estimates typically exclude special items.
Net revenue for the second quarter rose 61% year-over-year to $472.02 million. Excluding amortization of step-down in deferred revenue on acquisition, adjusted net revenue for the quarter increased 64% to $479.36 million. Ten analysts had a consensus revenue estimate of $471.82 million for the second quarter.
System solutions net revenue for the quarter rose 45%, while services net revenue surged 130.4% from a year earlier.
Region wise, U.S. And Canada revenue grew 6.8% to $128.9 million, while Europe, Middle East and Africa revenue jumped 113.3% to $198.9 million and Latin America revenue surged 71% to $96.2 million. Asia revenue rose 116% to $48.0 million.
Gross margins for the second quarter narrowed to 40.7% from 41.9% a year ago. Total operating expenses for the quarter jumped 83.5% to $156.4 million.
Looking forward to the third quarter, the company forecast adjusted net revenues of $495 million to $500 million and adjusted earnings of $0.68 to $0.70 per share. Analysts currently expect the company to earn $0.70 per share on revenue of $502.18 million for the third quarter.
For the fiscal year 2012, the company said it continues to expect net revenues of $1.900 billion to $1.925 billion and adjusted earnings of $2.60 to $2.66 per share. Analysts currently expect the company to earn $2.66 per share on revenue of $1.92 billion for the fiscal year 2012.
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by RTT Staff Writer
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