VeriFone Systems Inc.'s stock price tumbled after the maker of payment terminals reported third-quarter sales that fell short of analysts' estimates, citing unfavorable currency swings, competition in Europe and a fire in Brazil.
The shares of San Jose, Calif.-based VeriFone dropped as much as 13% to $30.81 in early trading after closing at $35.38 in New York yesterday. Through yesterday, the stock had declined less than 1% this year.
Revenue in the quarter rose 54% from a year earlier to $489.1 million, VeriFone said yesterday in a statement. That missed the average $498.7 million estimate, according to data compiled by Bloomberg. One reason for the shortfall was a July fire that destroyed the company's Brazilian staging-and-repair center, causing some VeriFone customers to turn to rivals. VeriFone also faced competitive pressure in France and Germany.
"The revenue was a little low in the quarter, and guidance for the next quarter and the next year was lower," said Gil Luria, an analyst at Wedbush Securities Inc., in an interview yesterday.
Net income rose 43% to $37.7 million, or 34 cents a share, from $26.3 million, or 28 cents, a year earlier. Profit excluding some items was 75 cents a share, topping the average 70 cent estimate.
VeriFone forecast fourth-quarter earnings excluding certain items of 75 cents to 77 cents a share. For the fiscal year ending in October 2013, profit excluding some items will be $3.25 a share to $3.30 a share. Sales in fiscal 2013 will be $2.05 billion to $2.10 billion, less than the average $2.16 billion estimate.