Shares of Verifone skidded more than 28 percent after hours on Tuesday (June 7) as the payments firm reported earnings per share that missed The Street by a nickel. The net income on an adjusted basis came in at $0.47 per share on sales of $526 million, while The Street had been at a respective $0.52 and $530 million.
The “difficult market dynamics” cited by the firm that gave rise to an EPS forecast of $0.51 (which meant it missed its own internal targets) also made it necessary for Verifone to reduce its own guidance for the remainder of the year. The remedy, in part, will be to reduce headcount in an effort to save $30 million through the next year, and management stated that a review of what had been termed “underperforming businesses” would be underway.
The firm is now looking at a profit of $1.85 a share on sales of about $2.1 billion, which is off from $2.21 to $2.24 on sales of $2.15 billion to $2.17 billion. The lack of leverage is no doubt disappointing to The Street, which sent the stock down to roughly $21, where it closed the session at about $28 on Tuesday. Gross margin was down a full 160 basis points year over year in the second quarter.
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