VeriFone climbs after better-than-expected 1Q
NEW YORK (AP) — Shares of VeriFone Systems Inc. got a boost Tuesday after the electronic payments company reported better-than-expected earnings for its fiscal first quarter and gave a brighter outlook than expected for the full year.
THE SPARK: VeriFone reported a net loss in the latest quarter, but its adjusted earnings of 58 cents per share beat analysts' estimates by 6 cents. Revenue was above expectations as well. For 2012, the company forecast earnings of $2.60 to $2.66 per share, above the $2.59 per share that analysts polled by FactSet are predicting.
THE BIG PICTURE: VeriFone Systems makes electronic systems that retailers use to accept payments. The company's systems can take payment from a variety of means, from credit cards to certain mobile phones. As mobile payments proliferate, it will likely see its revenue sources expand. On Monday, for example, the company announced that it signed a deal to accept payments through a mobile phone-based system called Isis, a joint venture between AT&T Mobility, T-Mobile USA and Verizon Wireless.
ANALYST COMMENT: UBS analyst John T. Williams said the company's guidance "seems a bit light" but the company remains in a good position to benefit from payment terminal upgrades and new electronic payment formats. He kept a "Neutral" rating on the stock and raised his target price to $51 from $50.
SHARE ACTION: Shares of San Jose, Calif.-based VeriFone rose $3.57, or 7.7 percent, to $50.12 in afternoon trading. The stock has traded in the 52-week range of $30.25 and $58.88.
