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Verifone (PAY) Q4 Earnings and Revenues Surpass Estimates
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VeriFone Systems Inc. (PAY - Free Report) reported fourth-quarter fiscal 2016 adjusted earnings (excluding all one-time items including stock-based compensation) of 21 cents per share, beating the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, the company reported adjusted earnings of 45 cents.
Management stated that increasing EMV demand and growth in EMEA (Europe, Middle East and Africa) and Latin American regions were the driving factors.
Quarterly Details
Non-GAAP revenues of $467.6 million decreased 9.1% year over year but beat the Zacks Consensus Estimate of $460.8 million.
System revenues (56.5% of total revenue) decreased 22% year over year to $264.3 million. Rest of the revenues came from the Services division, which increased 16% year over year to $203.3 million.
Non-GAAP revenues from North America fell 25.8% from the prior year quarter to $170.5 million. Revenues from Latin America rose 8.8% to $68.3 million. Revenues from EMEA also grew 10.1% year over year to $180.8 million. However, Asia Pacific revenues decreased 16.2% to $48.0 million.
The company’s non-GAAP gross margin dropped 390 basis points (bps) year over year to 39.5%.
As of Oct. 31, 2016, VeriFone had approximately $148.4 million in cash compared with $208.9 million as of Oct 31, 2015. Long-term debt totaled $860 million at the end of the quarter.
Cash flow from operations in the quarter was $67 million. Meanwhile, free cash flow totaled $44 million in the quarter.
Outlook
VeriFone provided guidance for the first quarter and updated its outlook for fiscal 2017.
The company projects non-GAAP revenues of approximately $450 million and non-GAAP earnings per share of 20 cents for the fourth quarter.
For fiscal 2017, the company estimates non-GAAP revenues within the range of 1.9 billion to $1.915 billion. Non-GAAP earnings per share are likely to be about $1.35 to $1.39 (down from the prior expectation of $1.64–$1.65).
VeriFone carries a Zacks Rank #4 (Sell).
Year to date, VeriFone has posted a negative return of 41.33% as against the Zacks Financial Transaction Services industry’s gain of 6.01%.
Better-ranked stocks in the broader tech space include TiVo Corp. , Facebook Inc. and LivePerson, Inc. (LPSN - Free Report) . TiVo sports a Zacks Rank #1 (Strong Buy) while Facebook and LivePerson carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TiVo has delivered an average positive earnings surprise of 97.76% in the trailing four quarters while Facebook and LivePerson have delivered positive earnings surprises of 21.11% and 56.43%, respectively over the same time frame.
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Verifone (PAY) Q4 Earnings and Revenues Surpass Estimates
VeriFone Systems Inc. (PAY - Free Report) reported fourth-quarter fiscal 2016 adjusted earnings (excluding all one-time items including stock-based compensation) of 21 cents per share, beating the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, the company reported adjusted earnings of 45 cents.
Management stated that increasing EMV demand and growth in EMEA (Europe, Middle East and Africa) and Latin American regions were the driving factors.
Quarterly Details
Non-GAAP revenues of $467.6 million decreased 9.1% year over year but beat the Zacks Consensus Estimate of $460.8 million.
System revenues (56.5% of total revenue) decreased 22% year over year to $264.3 million. Rest of the revenues came from the Services division, which increased 16% year over year to $203.3 million.
Non-GAAP revenues from North America fell 25.8% from the prior year quarter to $170.5 million. Revenues from Latin America rose 8.8% to $68.3 million. Revenues from EMEA also grew 10.1% year over year to $180.8 million. However, Asia Pacific revenues decreased 16.2% to $48.0 million.
The company’s non-GAAP gross margin dropped 390 basis points (bps) year over year to 39.5%.
VERIFONE SYSTMS Price, Consensus and EPS Surprise
VERIFONE SYSTMS Price, Consensus and EPS Surprise | VERIFONE SYSTMS Quote
Liquidity
As of Oct. 31, 2016, VeriFone had approximately $148.4 million in cash compared with $208.9 million as of Oct 31, 2015. Long-term debt totaled $860 million at the end of the quarter.
Cash flow from operations in the quarter was $67 million. Meanwhile, free cash flow totaled $44 million in the quarter.
Outlook
VeriFone provided guidance for the first quarter and updated its outlook for fiscal 2017.
The company projects non-GAAP revenues of approximately $450 million and non-GAAP earnings per share of 20 cents for the fourth quarter.
For fiscal 2017, the company estimates non-GAAP revenues within the range of 1.9 billion to $1.915 billion. Non-GAAP earnings per share are likely to be about $1.35 to $1.39 (down from the prior expectation of $1.64–$1.65).
VeriFone carries a Zacks Rank #4 (Sell).
Year to date, VeriFone has posted a negative return of 41.33% as against the Zacks Financial Transaction Services industry’s gain of 6.01%.
Better-ranked stocks in the broader tech space include TiVo Corp. , Facebook Inc. and LivePerson, Inc. (LPSN - Free Report) . TiVo sports a Zacks Rank #1 (Strong Buy) while Facebook and LivePerson carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TiVo has delivered an average positive earnings surprise of 97.76% in the trailing four quarters while Facebook and LivePerson have delivered positive earnings surprises of 21.11% and 56.43%, respectively over the same time frame.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>