VeriFone Systems, Inc. (PAY), which makes credit card swipe machines, said Wednesday after the markets closed that it swung to a second quarter loss, hurt by lower revenues and higher litigation loss contingency expense.
The company's quarterly earnings per share, excluding items, also came in below analysts' expectations as did its quarterly revenue.
At the same time, the company forecast third quarter revenue and earnings way below analysts' current consensus estimate.
Richard McGinn, VeriFone's Interim Chief Executive Officer, said, "We are keenly aware of the significant short-term challenges impacting our fiscal year 2013 financial results. To regain our momentum, we are addressing the critical issues head-on."
"While we are pleased with many aspects of our business, the next twelve months will be devoted to investing heavily in our customers, our products, and our people, to reverse the current trend and reposition ourselves to resume growth. We believe there is significant upside potential for both the payment technology business and our company," added McGinn.
VeriFone shares are currently losing 12.76% in after hours trading after closing the day's regular trading session at $21.95, down $1.14 or 4.94%. The shares trade in a 52-week range of $17.93 to $39.00.
McGinn took over from Douglas Bergeron, who stepped down VeriFone's Chief Executive Officer in March after about twelve years at the helm. The company has been searching for a permanent CEO.
For the second quarter ended April 30, 2013, the San Jose, California-based company reported a net loss of $56.4 million or $0.54 per share, compared to net income of $3.5 million or $0.03 per share for the year-ago quarter.
Excluding items, adjusted net income for the second quarter was $46.8 million or $0.42 per share, compared to $71.4 million or $0.64 per share in the prior year quarter.
On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.47 per share for the second quarter. Analysts' estimates typically exclude special items.
Net revenue for the second quarter fell 10% to $426.29 million from $472.02 million a year ago, while adjusted net revenue for the quarter also fell 10% to $429.75 million from $479.36 million last year. Fourteen analysts had a consensus revenue estimate of $440.29 million for the second quarter.
System solutions revenue for the quarter fell 19% from a year earlier, while services revenue climbed 14%.
Total operating expenses for the quarter jumped 29% to $223.9 million.
Looking forward to the third quarter, the company forecasts adjusted net revenues of about $400 million and adjusted earnings of about $0.20 per share. Analysts currently expect the company to earn $0.50 per share on revenue of $460.54 million for the third quarter.
The company also said it expects modest sequential increases in adjusted net revenues and adjusted earnings per share in the fourth quarter.
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