VeriFone Report Confirms Worst of Times

Want any more evidence that slumping sales for merchants and retailers are dragging others down with them?

Consider VeriFone(PAY Quote), which makes credit card machines and pay terminals, and saw sales drop 14% to $201.6 million from $233 million in the year-ago period.

Then again, the San Jose-based company also reported $18.6 million in profit, or 22 cents per share, compared with an $18 million loss, or loss of 21 cents, from last year's second quarter. After excluding certain items, earnings came to 17 cents per share, versus 19 cents per share in the same period last year.

Back in March, VeriFone forecasted that second-quarter revenues would come between $205 and $215 million, with adjusted profit per share ranging from 14 cents to 18 cents. Analysts polled by Thomson Reuters expected revenues to land around 208 million, along with earnings of 15 cents per share.

"Our revenue results continued to be challenged by the difficult global economic environment," CEO Douglas Bergeron said in a release. "It is still too early to predict when VeriFone's revenue will rebound, but we remain confident of our earnings and cash generation capabilities."

The San Jose-based operation also reported third-quarter guidance, saying investors should expect revenues to stay flat to second quarter revenues. VeriFone added that adjusted earnings should land between 15 cents and 18 cents.

Shares fell by more than 5% in regular trading, and were still treading in negative territory during after-hours market.