Hardware and software security systems developer Vasco Data Security International, Inc. (VDSI) reported Tuesday a decline in third-quarter profit that missed analysts' estimate, as revenues decreased 44% year-on-year.
Kendall Hunt, chief executive of Vasco Data Security, said, "The results for the third quarter of 2009 reflected the current challenging economic environment and the lower levels of activity that are due to the normal seasonal trends, including the holiday schedules in Europe."
For the third quarter, net income dropped sharply to $1.52 million or $0.04 per share from $9.12 million or $0.24 per share in the previous year. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.05 per share for the third quarter. Analysts' estimates typically exclude special items.
Operating income for the three-month period fell 83% to $1.95 million from $11.44 million.
Net revenue declined 44% to $22.13 million from $39.70 million in the third quarter of the prior fiscal year. Eight analysts were expecting revenue of $25.36 million.
Gross margin was 70%, flat with the corresponding quarter of the past year. Operating expenses were $13.44 million, down from $16.40 million in the third quarter of 2008.
Jan Valcke, Vasco's chief operating officer, added that the company's banking customers continued to order small quantities to meet their short-term needs. The company foresees an increase in activity from customers in the banking market and expects volume of orders to rise in the fourth quarter.
For the nine-month period, net income slid to $7.03 million or $0.18 per share from $21.48 million or $0.56 per share in fiscal 2008. Revenue declined 33% to $69.76 million from $104.04 million in the same period last year.
VDSI closed Monday's regular trading hours at $7.10 on the NASDAQ.
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