VeriFone Systems Inc. (PAY) tumbled as much as 35 percent in late trading yesterday after the maker of credit-card terminals forecast second-quarter profit that missed analysts' estimates, amid weak economic conditions in Europe.
The shares plunged as low as $20.81, after earlier falling 3.5 percent to $31.89 at the close in New York. Earnings excluding some items will be 45 cents to 50 cents a share in the quarter ending in April, San Jose, California-based VeriFone said in a statement yesterday. Analysts on average had predicted profit of 80 cents a share, according to data compiled by Bloomberg.
VeriFone also announced preliminary first-quarter adjusted profit of 47 cents to 50 cents a share, less than the company's prior projection of as much as 73 cents. Beyond Europe, VeriFone said it experienced lower-than-anticipated sales from customers in Brazil, and that it had an increase in deferred revenue from clients in Africa and the Middle East.
"The preannouncement is very bad; they are missing their targets by a very wide margin," Gil Luria, an analyst at Wedbush Securities Inc., said in a telephone interview. "The macroeconomic conditions are certainly not enough to explain such a dramatic shortfall."
Verifone's recent acquisitions probably didn't boost the company's growth as much as projected, and may have to be restructured, Luria said.
Last year, Verifone bought LIFT Retail Marketing Technology Inc., a provider of convenience-store digital-marketing systems, and Swedish payment-services provider Point, as well as other companies.
Victoria Brown, a spokeswoman for VeriFone, declined to comment.