The share price of VeriFone Holdings Inc. fell sharply Thursday after the payments terminal company warned that its fiscal fourth-quarter earnings would not meet expectations.
The San Jose company said Wednesday that it expected revenue for the period ended Oct. 31 to be $244 million to $246 million and that earnings would be 18 cents to 20 cents per share.
When it reported its fiscal third-quarter results in September, VeriFone said it expected fourth-quarter revenue of $260 million to $268 million and earnings of 33 cents to 36 cents per share.
Robert Dykes, VeriFone's chief financial officer, pinned the revision on slowing demand worldwide, largely in response to the continuing economic turmoil, and bigger-than-expected foreign exchange costs.
Gil Luria, an analyst at Wedbush Morgan Securities, wrote in a research note published Thursday that the terminal company's sales could be slow next year as well. "We continue to believe the strength of its products and relationships positions VeriFone for long-term success," he wrote. "Nevertheless, given decelerating global economic growth, we believe 2009 performance will likely be below trend."
Mr. Luria, who rated VeriFone shares "hold" and set a $6 price target, predicted that its earnings and revenue growth would be in the low single-digits through next year.
By Thursday afternoon, VeriFone's shares were trading down 47.74% from Wednesday's closing price, at $3.23.
Its fiscal fourth-quarter earnings are to be released Dec. 16.