Handicapping This Payment Operator's Earnings Report

VeriFone (PAY) doesn't get a ton of credit for its own mobile payment solution and efforts underway to scale it up (all praise goes to Square). But, that is a debate for a different day as it speaks to the longer-term, structural shifts in the industry. I think there are simple, valid reasons to be cautious on the stock in front of earnings, and here is why… •74% of revenues and 68% of operating income leveraged to international. European and emerging market retail sales have been slowing, perhaps pushing out terminal upgrades and the need for associated services. In particular, I am concerned with a 2011 acquisition that caters to Northern Europe amid clear signs of macro contagion. •There is a decent enough amount of investments being made to set the foundation for the next cycle in the industry (mobile payments), so much so that if revenues underwhelm…operating margins could follow. •U.S. taxi cab business has been renewed at higher costs, partially offsetting a favorable product mix. However, should sales leverage weaken, an overhang such as a higher cost contract will stick out. Note that if any of the items listed do occur, it may spark a returning debate on the company's free cash flow generation (voiced by one analyst on the sell-side specifically).