VeriFone posts 2Q loss on litigation charge
VeriFone takes 2nd-quarter loss and revenue falls short of estimates; shares slump aftermarket
SAN JOSE, Calif. (AP) -- VeriFone Systems Inc. said Wednesday it took a loss in the fiscal second quarter on litigation charges, and forecast disappointing results in the current quarter.
The maker of terminals for electronic payments said sales in most regions fell during the April quarter. It plans to invest significantly more money in new products.
Shares of VeriFone Systems lost $3.45, or 16 percent, to $18.50 in after-hours trading. That's on top of a 4.9 percent decline during regular trading. The stock has lost more than a quarter of its value in the year to date.
VeriFone said it set aside $69 million during the quarter to cover litigation contingencies. It took a loss of $58.4 million, or 54 cents per share. A year ago the company earned $3.5 million, or 3 cents per share.
Revenue fell 10 percent, to $426.3 million from $472 million. The company's system solutions revenue dropped 19 percent to $276.7 million, but that was partially offset by service revenue, which grew 14 percent to $149.7 million.
Excluding one-time items VeriFone said it earned 42 cents per share on $430 million in revenue in the latest period.
Analysts expected adjusted income of 47 cents per share and $440.2 million in revenue, according to FactSet.
VeriFone said in March that it had failed to spend enough time and money tailoring its products to the needs of local merchants, and said its sales staff was not executing. Longtime CEO Douglas Bergeron stepped down about a week later, and Chairman Richard McGinn became its interim CEO.
"We are substantially increasing our R&D investment to best serve our customers and regain competitiveness in markets where we have product gaps," McGinn said Wednesday in a press release.
The company forecast adjusted income of 20 cents per share and $400 million in adjusted revenue in the third quarter, and said its fourth-quarter results would be stronger.
On average, analysts expect net income of 51 cents per share and $460.5 million in revenue in the third quarter.
