Boston, MA 12/19/2013 (wallstreetpr) – VeriFone Systems Inc (NYSE:PAY) reported its fiscal fourth quarter this week and the overall result was relatively weak. Companies which can’t deliver strong revenue and earnings growth often scare away investors and this is what is facing PAY.
The company’s partnership with companies such as Costco Wholesale Corporation (NASDAQ:COST), American Express Company (NYSE:AXP) and McDonald’s Corporation (NYSE:MCD) was expected to have some positive impact on its top-line. This can be seen in the manner in which analysts upped their estimates on the stock’s revenue only to end up with disappointments.
Perhaps it can be hoped that given the company’s innovative product pipeline, coupled with the deals with the aforementioned companies, it could bolster its revenue in the coming quarter.
Looking at the factors which contributed to the weaker revenue in the just reported quarter can also tell something about the future. The company experienced tepid revenue growth in the quarter due to slow economic environment. The earnings were also hurt by the higher operating expenses experienced in the quarter.
In addition to the sluggish economy and high operating expenses, PAY also has to deal with the mounting competition if any better results can be realized in the next quarter reporting.
After issuing the relatively weak quarter, PAY offered a cautious outlook which suggests that the management is acknowledging the volatile economic condition that prevails in the market. Warning about the future is not what investors are looking for so the management has to execute to prove its potency.
The figures
In the just reported quarter, PAY earned $0.27 per share, increasing about 12 percent sequentially but plunging more than 64 percent from the corresponding quarter last year. Revenue came in at $432.3 million, up 3.5 percent sequentially and down 11.5 percent year-on-year.
The stock of VeriFone Systems Inc (NYSE:PAY) is trading in the range of $23.28 and is up significantly year-to-date. The company is valued at $2.54 billion in the market and its shares outstanding are approximately 109 million.
