The payments processor CyberSource Corp. was downgraded by two analysts Friday after reporting lower second-quarter earnings and warning that it will probably post a third-quarter loss.
JMP Securities LLC cut its recommendation to "market perform," from "market outperform." Needham & Co. LLC downgraded CyberSource to "hold," from "buy." CyberSource's shares fell 12.9% Friday to close at $12.03.
The Mountain View, Calif., company said Thursday that its net income for the second quarter was $200,000. That was twice what it had told investors to expect but off 75% from last year's second quarter. Revenue rose 40%, to $22.9 million.
Bill McKiernan, CyberSource's chairman and chief executive, said on a conference call Thursday that the second-quarter results "include significant noncash charges like stock option compensation and noncash tax expenses."
CyberSource said it expects to report a third-quarter net loss of $800,000 because it will start to face integration costs after buying Authorize.Net Holdings Inc. of Marlborough, Mass. It expects to close the $565 million deal in the fourth quarter.
CyberSource said it expects a seasonally strong fourth quarter to enable it to meet its full-year earnings guidance of $3.5 million to $4 million. That figure does not include acquisition or integration costs for Authorize.Net, it said.
