Verifone (PAY 17.20, -1.12) has slid 6.1% despite reporting a slim bottom-line beat.
The provider of payment processing solutions for businesses reported above-consensus second quarter earnings of $0.30 per share on a 9.9% year-over-year decline in revenue to $474 million, which was just ahead of expectations.
Systems revenue fell 16.6% year-over-year to $285.70 million while Services revenue declined 2.3% to $188.00 million. Gross margin declined to 39.5% from 42.4% one year ago.
Verifone CEO Paul Galant noted that the company beat its internal goals thanks to double-digit sequential growth in North America retail and Small Merchant Businesses verticals, combined with strong demand from India.
Verifone has taken steps to streamline its business and restructure/eliminate underperforming areas like Petro Media, Verifone China, and Taxi Solutions.
Verifone combined its Petro Media advertising business with Gas Station TV as part of a 50/50 joint venture. Verifone's China operation will be divested into a locally-owned and operated company, but Verifone will maintain a minority interest in the business, which is expected to be divested in the third quarter. As for Taxi Solutions, Verifone is actively looking to divest this unit, and hopes to do so in the next several quarters.
Looking ahead, the company expects third quarter earnings between $0.35 per share and $0.36 per share on revenue between $463 million and $465 million. For the full year, the company expects earnings between $1.32 per share and $1.34 per share on revenue between $1.86 billion and $1.87 billion. Verifone's guidance excludes Petro Media and China businesses, but includes Taxi Solutions. This means the company's guidance is not comparable to market expectations.