VeriFone Plummets After Paring Forecast, Announcing Layoffs

VeriFone Systems Inc. stock fell more than 20% in late trading Tuesday after the company reported disappointing quarterly earnings, announced layoffs and reduced its annual forecast. The payment-systems company reported profit of 3 cents a share on sales of $526 million; after adjustments, VeriFone claimed profit of 47 cents a share. Analysts polled by FactSet expected earnings of 52 cents a share on sales of $530 million, and VeriFone had forecast profit of 51 cents to 52 cents a share. Citing "difficult market dynamics," VeriFone Chief Executive Paul Galant brought down the company's forecast for the 2016 fiscal year and said headcount would be cut to save $30 million in 2017. "We are aggressively executing mitigating actions including a headcount restructuring and a review of underperforming businesses," Galant said in the announcement. The company now expects profit of $1.85 a share on sales of $2.1 billion, down from a projection of $2.21 to $2.24 a share in profit on sales of $2.15 billion to $2.17 billion. VeriFone shares plunged to less than $21.50 after closing with a 1.3% gain at $28.22.