NEW YORK (
(PAY - Get Report)
plummeted 20.87% to $17.37 as the point-of-sale systems provider reported disappointing numbers at the end of its fiscal second quarter.
VeriFone reported earnings of 42 cents per share, falling 5 cents short of estimates. Revenue also fell below expectations, coming in at $429 million as opposed to the estimated $440 million, down 10% year-over-year.
Analysts note that the San Jose, Calif-based company is shooting itself in the foot. "We believe that VeriFone's wounds are largely self-inflicted as it struggles to deal with aging products that are bringing it persistent competition for share," said
analysts James Faucette and Brad Erickson. The analysts lowered estimates based off the earnings report. They now expect VeriFone will generate $1.28 per share on $1.67 billion in sales, down from $2.17 per share in earnings on $1.81 billion in revenue.
There is a light at the end of the tunnel for the struggling company.
analysts Gia Luria and Aaron Turner are optimistic about the future of VeriFone. "We believe VeriFone can hold its position as a payment terminal market leader with a longer-term potential to resume mid-single-digit organic revenue growth," they wrote in their research note.
analysts echoed those sentiments, saying new management and an increase in resource and development spending may salvage the company's outlook. "First, management expects to increase its R&D spend and was happy to see good performance in the geographies where R&D was not cut. Second, PAY has made significant changes within senior and middle management of the company and will be bringing on additional talent in future quarters."
Written by David Webster in New York