VeriFone Systems Inc. PAY reported second-quarter fiscal 2017 adjusted earnings (Including stock-based compensation) of 20 cents, missing the Zacks Consensus Estimate by 3 cents.
Adjusted earnings (excluding stock-based compensation) of 30 cents per share decreased 45.6% from the year-ago quarter but were better than management's guided figure of 29 cents.
The year-over-year decline in earnings was primarily due to lower revenues, which decreased 11% to $473.9 million, slightly better than the Zacks Consensus Estimate. The figure was in line with high-end of management's guided range of $470–$474 million.
Management stated that double-digit sequential growth in North America retail and SMB business verticals along with strong demand for devices in India helped the company to meet guidance.
We also note that both gross and operating margin declined in the quarter reflecting higher costs. Based on the unimpressive results and divestiture of three non-core businesses, the company lowered fiscal 2017 guidance.
Shares fell 3.1% in after hour trading. We note that VeriFone has underperformed the Financial Transaction Services industry on a year-to-date basis.
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