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Point-of-sale terminal maker VeriFone Holdings Inc. says growth in its international sales was not enough to stave off a lowered fourth-quarter earnings outlook fueled by a decline in sales to small and medium-sized U.S. merchants, Douglas G. Bergeron, VeriFone CEO, told analysts during a conference call yesterday. "Our processor and ISO channels are telling us that new merchant applications, which we're very leveraged into, have fallen in the neighborhood of 25% to 30%," Bergeron said. Meanwhile, international sales grew to the mid-teens compared with the fourth quarter of 2007. VeriFone's fiscal year ended Oct. 31. It expects to report its fourth quarter and 2008 results Dec. 16. San Jose, Calif.-based VeriFone predicts its fourth-quarter revenue will total between $244 million and $246 million, down 6% to 8% from the company's Sept. 9 guidance of $260 million to $268 million. The company reported $238 million in revenue for last year's fourth quarter (CardLine, 11/20). VeriFone also said it would reduce its operating expenses. In the United States, VeriFone's revenue among financial services saw a decrease in the mid-to-high 20% range drop versus last year, Bergeron said. The company will release explicit revenue data Dec. 16, Bergeron said. Payment terminal sales to petroleum businesses saw a decrease in the low 30% range, he said. Only multi-lane sales in the U.S. had growth, in the low teens, Bergeron told analysts. Internationally, Latin America sales had a mid-40% growth over last year, with growth in Asia in the low-teens and European sales growth in the high single-digits, Bergeron said. He also explained that all areas of VeriFone's business, including sales, research and development and administration, are under review. "In a world that's growing at 5% to 10%, not 10% to 15%, for a year, you look at some of the more opportunistic spending, both in R&D and marketing," Bergeron said. "You suspend, mothball or slow down some of it."
