VeriFone Swings to Profit

VeriFone Systems Inc. swung to a profit as the electronic-payments-equipment company benefited from strong revenue growth in North America during the quarter ended in April.

For the year ending in October, VeriFone raised its per-share earnings estimate to $1.81 to $1.84 with revenue of $1.995 billion to $2 billion, from its previous estimate for per-share profit of $1.78 to $1.82 and revenue of $1.99 billion to $2 billion.

For the current quarter, the company forecast per-share earnings of 44 cents to 46 cents and revenue of $495 million to $500 million. Analysts polled by Thomson Reuters expected per-share profit of 46 cents and revenue of $501 million.

San Jose, Calif.-based VeriFone has been realigning its business to focus on mobile and digital technology while aiming to expand abroad.

The company has been benefiting from a shift to chip-embedded credit and debit cards as issuers aim to improve security, as well as technology used in mobile payments through services like Apple Pay.

Chief Executive Paul Galant said the company "achieved record North America results while also gaining share across several key European markets."

In the latest quarter, net revenue in its North America business surged 54%. Excluding currency effects, net revenue in the Europe, Middle East, Africa segment rose 7.6%.

For the period ended April 30, VeriFone reported a profit of $17.6 million, or 15 cents a share, compared with a year-earlier loss of $23.9 million, or 22 cents a share. Excluding acquisition-related effects, stock-based compensation and other items, per-share earnings rose to 44 cents from 37 cents. Revenue, excluding some fair-value adjustments, increased 5% to $490.3 million. Excluding currency impacts, revenue climbed 14%.

The company expected per-share profit of 41 cents to 42 cents and revenue of $485 million to $489 million.

Write to Tess Stynes at [e-mail]

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