Why Verifone Systems, Inc. Stock Plunged Today
Image source: VeriFone Systems.
What happened
Shares ofVerifone Systems, Inc.(NYSE: PAY)were down 19.1% as of 11:30 a.m. ET Wednesday after the payments and commerce solutions company announced weaker-than-expected fiscal third-quarter 2016 revenue.
So what
Adjusted quarterly revenue fell 3.4% year over year, to $493 million, and translated to a 10.6% decline in adjusted net income per diluted share, to $0.42. By comparison, Verifone's guidance provided three months agocalled for significantly higher adjusted revenue of $515.4 million, and adjusted net income of $0.40 per share.
Verifone CEO Paul Galant explained:
Now what
For the current (fiscal fourth) quarter, Verifone anticipates adjusted revenue of $460 million, and adjusted net income per share in the range of $0.28 to $0.29. Analysts, on average, were modeling higher fiscal Q4 adjusted revenue of $536.3 million, and adjusted earnings of $0.50 per share.
Finally, for the full fiscal year, Verifone now expects adjusted revenue of $2.0 billion, and adjusted net income per share of $1.64 to $1.65. Both ranges mark reductions from its previous guidance, which was reduced last quarter to predict fiscal 2016 revenue of $2.1 billion, and earnings of $1.85 per share.
That said, Galant also insisted the company is "relentlessly executing the long-term vision for Verifone to transform from a box shipper to a services provider." But after combining its relative underperformance so far with yet another full-year guidance reduction, it's no surprise investors are taking another big step back from Verifone today.
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