What To Expect When VeriFone (PAY) Reports Q4 Earnings?
Zacks Investment Research | Dec 06, 2016 10:00PM ET
VeriFone Systems, Inc. (NYSE:PAY) is set to report results for the fourth quarter of fiscal 2016 on Dec 12. Last quarter, the company posted a positive earnings surprise of 6.45%. In the trailing four quarters, the company has yielded an average positive earnings surprise of 2.16%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
VeriFone’s business has been affected by weakness in emerging markets like Latin America and Turkey. Furthermore, delays in installations of the EMV enabled PoS in the U.S. also weighed on the financials.
VeriFone does hold a prime position in the electronic payment systems and services market. The company is benefiting from the increasing adoption of new payment solutions from Apple (NASDAQ:AAPL) , Alphabet (NASDAQ:GOOGL) and Samsung (KS:005930) in the mobile payments industry. Recently, VeriFone joined forces with Japanese payment and marketing solutions as a service provider, Vesca, to offer its services in the Asian country. VeriFone also announced a partnership with Alipay. The new collaboration will result in acceptance of Alipay across all big retail outlets in Europe and North America.
The company has also initiated a new restructuring program to focus on streamlining its operations and carve a growth trajectory for the long run. VeriFone expects these restructuring activities to start generating savings from the fourth quarter of 2016 onward, leading to savings of nearly $30 million in 2017.
For the fourth quarter, the company projects non-GAAP revenues of approximately $460 million and non-GAAP earnings per share in the range of 28 to 29 cents. For fiscal 2016, the company estimates non-GAAP revenues of approximately $2 billion (earlier projection was $2.100 billion). Non-GAAP earnings per share are likely to be about $1.64–$1.65 (down from the prior expectation of $1.85).
Earnings Whispers
Our proven model does not conclusively show that VeriFone will beat earnings estimates this quarter. This is because a stock needs to have both a positive Zacks Investment Research
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