ATLANTA - Nova Corp. said second-quarter operating income rose 8% but a massive charge dragged the company to a net loss.
Nova, which warned in late July that profits would fall short of expectations, said it earned $22.1 million before the charge, up 7.8% from $20.5 million a year ago. On a diluted per-share basis, earnings were 31 cents on revenues of $405.8 million, up from 28 cents a year earlier.
The charge, which came to $142.5 million on a pretax basis, resulted in a net loss of 99 cents a share. The charge included $84.6 million related to merchant contracts acquired as part of the company's 1998 acquisition of PMT. The remainder of the charge, or $57.9 million, was for receivables the company said it did not believe it would collect.
With respect to the latter, chief executive officer Edward Grzedzinski said in a statement, "In examining various receivables emanating from former PMT business units, we have also concluded that certain items warrant further action and, as a consequence, litigation is either in process or pending. It would be inappropriate to elaborate any further on these items."
The company also released target projections for revenue growth for the third and fourth quarters of 5% to 6%, which it said suggested operating earnings per share of $1.22 to $1.26 for the full year.