Headlines:
Harland Stock Drops Despite Profit Climb Purchases Pull Down Cardtronics' Results Peppercoin of Mass. Gets $10M of Funds
Harland Stock Drops Despite Profit Climb
John H. Harland Co. reported Wednesday that third-quarter earnings grew 53% from a year earlier, to $18.6 million, but its stock fell Thursday, because investors had expected more.
The Atlanta check printer and financial technology vendor said sales grew 33%, to $128.7 million. Harland bought the Mounds View, Minn., check printer Liberty Enterprises Inc. in June and the Cincinnati core processing outsourcer Intrieve Corp. in April.
But earnings per share of 65 cents fell 4 cents short of the average expectation of analysts, and the company's stock was down 12.42% by midday Thursday, to $37.52 a share. Harland released its earnings report after the market closed Wednesday.
Various charges in the company's printed products and software and services divisions pulled down the results for the third quarter of last year by $9.6 million, or 22 cents a share.
Harland said sales in its printed products division grew 36%, to $159.8 million, and the division's income rose 149%, to $24.2 million. For the third quarter of last year, Harland recorded a $7.9 million charge for the development of new systems in the division.
Sales in the software and services division grew 48.1%, to nearly $70 million, and the division's income rose 20%, to $8.8 million.
But sales in a third business, the one that makes the Scantron educational products, fell 2%, to $30.9 million, and its income fell 3%, to $9.5 million.
Harland said it expects to report fourth-quarter earnings of 71 to 76 cents a share, and it still expects to report full-year earnings of $2.65 to $2.70.
Purchases Pull Down Cardtronics' Results
The Houston automated teller machine independent sales organization Cardtronics Inc. reported a third-quarter net loss of $218,000, in part because of a series of acquisitions this year.
Revenue rose 13.3%, to $71.7 million, Cardtronics said this week. For the same quarter last year, it reported net income of $2 million.
Cardtronics purchased ATM portfolios from BAS Communications Inc. in March, Neo Concepts Inc. in April, and Bank Machine Ltd. in the United Kingdom in May.
"Over the last 12 months we've taken on a lot of new business," J. Chris Brewster, its chief financial officer, said in an interview Thursday. "When you close the acquisitions or buy the equipment, you've got all the interest expense and the appreciation expense associated with that, and sometimes it takes a little time to be hitting on all eight cylinders."
The company's costs also increased because it installed ATMs in Walgreen Co. and CVS Corp. stores throughout the United States during the second and third quarters.
Mr. Brewster said that earnings before interest, taxes, depreciation, and amortization are a better measure of Cardtronics' performance. Those earnings rose 26.4%, to $11 million.
The number of transactions made at Cardtronics ATMs increased 15.9%, to $42.2 million. The Bank Machine portfolio fueled that growth, because the machines are used more frequently than Cardtronics' domestic ones.
Cardtronics is not publicly held, but because of an August bond offering it must register with the Securities and Exchange Commission and file earnings reports.
Peppercoin of Mass. Gets $10M of Funds
The Waltham, Mass., micropayment software vendor Peppercoin Inc. has received $10 million in its second round of funding.
Peppercoin said it plans to use the investment, announced Wednesday, to promote the use of payment cards for low-value transactions.
Its software, which aggregates several payments into a single transaction that incurs a single transaction fee from a card issuer, is designed to reduce the costs of accepting cards for small purchases.
Wall Street Technology Partners LP was the lead investor, as it was in the first round. Some other first-round investors, including the Boston private equity company Pod Holding Inc., a large Boston institutional investment adviser, and several private investors, also participated in the second round. The Atlanta venture capital company Total Technology Ventures LLC contributed $2 million.
Peppercoin raised $8 million in August.
Many merchants that sell low-priced digital goods online have complained that it is prohibitively expensive for them to accept cards. Last month Peppercoin announced that Loudeye Corp., which hosts music Web sites, had agreed to use its software.
The software is also used in devices such as jukeboxes and arcade games.
