Earnings Scorecard: VeriFone - Analyst Blog
10 Junho 2011 - 11:26AM
Zacks
VeriFone Systems Inc. (PAY) recently reported
results for the second quarter of fiscal 2011. The company posted a
net income (excluding one-time charges but including stock-based
compensation expense) of 38 cents per share, in line with the Zacks
Consensus Estimate.
VeriFone upgraded its guidance for fiscal 2011. For fiscal 2011,
VeriFone projects revenues between $1.170 billion and $1.180
billion. Earnings per share (excluding stock-based compensation and
one-time charges) are projected around $1.80–$1.83. This excludes
any impact from the Hypercom acquisition.
For the second quarter of fiscal 2011, management expects
revenues between $295 million and $300 million in the third quarter
of 2011. Earnings per share are projected around 45 cents to 46
cents.
Second Quarter Earnings Flashback
VeriFone reported revenues of $292 million in the second quarter
of fiscal 2011, up 21% year over year and up 3% sequentially,
beating the Zacks Consensus Estimate of $283 million. There was
growth in revenues across all segments.
North America delivered a 14% year-over-year growth. Revenue
from international markets grew 28% year over year. Latin America
grew 11%, Europe grew 41% and Asia increased 25%.
Net income came in at $25.2 million or 27 cents compared with a
net income of $32.0 million or 35 cents per share in the previous
quarter and a net income of $20.2 million or 23 cents in the
year-ago quarter.
Agreement of Estimate Revisions
Fiscal earnings estimates have moved in both directions for
VeriFone since the earnings release. For fiscal 2011, out of 5
analysts, 3 analysts have negatively revised their estimates while
1 moved upward in the last 7 days. For fiscal 2012, 2 out of 5
analysts covering the stock have revised their estimates upward,
while 2 have lowered during the same time period.
Magnitude of Estimate Revisions
In the last seven days, the Zacks Consensus Estimate for 2011
was stable at $1.57 per share. For 2011, the estimates range from
$1.50 to $1.64. For fiscal 2012, earnings estimates have increased
by 4 cents to $1.96 during the same time period.
Our Take
We believe that with resurgence in the economy, revenue growth
at Verifone should accelerate in fiscal 2011. Moreover, demand for
newer services will also fuel VeriFone’s growth.
The company continues to expand its footprint in international
markets. Last year, the company announced that it would acquire its
rival Hypercom Corporation (HYC) for approximately
$7.32 per share or $485 million. The acquisition is expected to
close in the second half of 2011.
We see a lot of potential for growth in the coming quarters.
Therefore, we are maintaining long term Outperform recommendation
on the stock.
However, the results in the quarter suffered due to increase in
share count and higher discretionary expenses. Thus, the stock has
a Zacks #3 Rank, which translates into a short-term Hold’
rating.
Based in San Jose, California, VeriFone provides solutions for
electronic payment systems for the financial, retail, hospitality,
petroleum, transportation, government and health care vertical
markets.
About Earnings Estimate Scorecard
Len Zacks, PhD in mathematics from MIT, proved over 30 years
ago that earnings estimate revisions are the most powerful force
impacting stock prices. He turned this ground breaking discovery
into two of the most celebrating stock rating systems in use today.
The Zacks Rank for stock trading in a 1 to 3 month time horizon and
the Zacks Recommendation for long-term investing (6+ months). These
“Earnings Estimate Scorecard” articles help analyze the important
aspects of estimate revisions for each stock after their quarterly
earnings announcements. Learn more about earnings estimates and our
proven stock ratings at: http://www.zacks.com/education/
HYPERCOM CORP (HYC): Free Stock Analysis Report
VERIFONE HLDGS (PAY): Free Stock Analysis Report
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