Hypercom Corp., which sells point of sale terminals and payments software and services, said Friday that its net income jumped from $500,000 in the second quarter to $4.2 million in the third.
A year-earlier loss of $38.3 million had been attributed to restructuring charges.
The Phoenix company gave a sanguine outlook for the terminal market, citing a big contract it won with China's major bank card network, China Union Pay, and upcoming renewals with such major customers as First Data Corp.
"We have a very diversified presence in the marketplace," said John W. Smolak, Hypercom's chief financial officer, in an interview Friday after the company's earnings conference call. "We are seeing terminals shipped to China, good growth in Europe, and independent sales organizations are increasingly pulling demand,"
Last year Hypercom started signing up ISOs to distribute its products and services, and the company is looking to that effort for growth, Mr. Smolak said. "It was a long-overlooked opportunity," he said. "We're committing more resources to it."
Meanwhile, Hypercom's top competitor in the terminal business, VeriFone, released some numbers of its own Friday, though because it is still private, details on its operations are scarce. Verifone is majority-owned by the Chicago venture capital group GTCR Golder Rauner LLC but sources say it is planning an initial public offering sometime in the second half of next year.
Verifone said it expects to rack up $90 million of revenue for its current quarter (which will end Friday), 12% more than a year ago. It did not give a net income figure.
"We've done phenomenally well and had a great deal of business, largely at the expense of Hypercom," said chief executive Douglas Bergeron in an interview Friday. "But nobody knows about it, because we're not a public company."
Neither company discloses how many terminals it ships, but according to the payments newsletter The Nilson Report, Hypercom shipped 1.3 million last year, 15% more than a year earlier, and Verifone 1.7 million, a 59% jump.
Both companies said fast-food restaurants are a particularly bright spot in the terminal market. Visa U.S.A. and MasterCard International reduced interchange rates for such merchants this year, encouraging them to install terminals. VeriFone said it is McDonalds Corp.'s "chosen vendor."
