VeriFone (PAY) Q3 Earnings In Line, Revenues Beat Estimates
Zacks Investment Research | Sep 07, 2017 10:20PM ET
VeriFone Systems Inc. (NYSE:PAY) reported third-quarter fiscal 2017 non-GAAP earnings of 36 cents, in line with the Zacks Consensus Estimate but down 13.2% from the year-ago quarter. The figure was also in line with the high end of management’s guidance range of 35-36 cents.
The year-over-year decline was primarily due to lower non-GAAP revenues, which decreased 4.3% to $466.9 million, slightly better than the Zacks Consensus Estimate. The decline can be attributed to anticipated sluggishness in the Asia Pacific, particularly India, and weakness in North America. This was partially offset by strong revenue growth in Latin America and the Europe, Middle East and Africa (EMEA).
VeriFone is now in the process of divesting the taxi business. In June, the company completed the restructuring of operations in China. The company now has a minority stake in the newly created local company. As noted earlier, VeriFone formed a 50/50 joint venture by combining its Petro Media advertising business with Gas Station TV during the second quarter.
These divestitures will help in improving services gross margin by at least 200 basis points (bps). Management believes that improving margin profile of services business coupled with success of Engage (fourth quarter launch in 15 countries) and Carbon 8 (fiscal 2018 launch) platforms will drive overall results, going forward.
Verifone Systems, Inc. Price, Consensus and EPS Surprise
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