VeriFone Shares Plunge on Weak Profit Forecast

Wednesday, 20 Feb 2013 05:20 PM

 

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Shares of VeriFone Systems Inc. tumbled 35 percent late Wednesday after the maker of credit-card terminals forecast second-quarter profit that missed analysts’ estimates, amid weak macro economic conditions in Europe.

The shares plunged as low as $20.81 in extended trading, after earlier closing down 3.5 percent at $31.89 in New York. Earnings excluding some items will be 45 cents to 50 cents a share in the second quarter, San Jose, California-based VeriFone said in a statement. Analysts on average had predicted profit of 80 cents a share, according to data compiled by Bloomberg.

VeriFone also announced preliminary first-quarter adjusted profit of 47 cents to 50 cents a share, less than the company’s prior projection of as much as 73 cents. Beyond Europe, VeriFone said it experienced lower than anticipated sales from customers in Brazil and also had an increase in deferred revenue from clients in Africa and the Middle East.

“The preannouncement is very bad; they are missing their targets by a very wide margin,” Gil Luria, an analyst at Wedbush Securities Inc., said in a telephone interview. “The macro-economic conditions are certainly not enough to explain such a dramatic shortfall.”

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