* Expects 3rd-qtr adj profit/shr $0.33-$0.34 vs est $0.37
* Expects 3rd-qtr revenue $455-$460 mln vs est $453.8 mln
* 2nd-qtr adj profit/shr $0.37 vs est $0.32
* 2nd-qtr revenue $466.4 mln vs est $443.4 mln
* Shares rise about 4 pct after the bell
(Adds details from conference call, analyst comment)
By Sampad Patnaik
June 5 VeriFone Systems Inc, a maker of
credit card swipe machines, reported better-than-expected
results for the second quarter, mainly helped by customers in
Australia and retailers upgrading equipment with new security
VeriFone's shares rose about 4 percent in extended trading.
"They (VeriFone) struggled there (Asia) in the past, and
what happened this year was they signed up some large Australian
customers and started rolling out even faster than they thought
they would," analyst Gil Luria with Wedbush Securities Inc said.
The company also forecast higher-than-expected revenue for
the current quarter, benefiting from higher sales to U.S.
retailers looking to upgrade point-of-sale equipment that can
read cards with chips.
VeriFone forecast revenue of $455 million to $460 million in
the quarter ending July 31, ahead of the average analyst
estimate of $453.8 million, according to Thomson Reuters
U.S. retailers are upgrading the payment systems to make
them compatible with more secure cards in the wake of several
data breaches, including the one at Target Corp.
United States accounts for nearly half of global credit card
fraud despite handling only 27 percent of all card volume,
according to Barclays analyst Darrin Peller.
VeriFone's France-based rival Ingenico forecast in
February that revenue would rise at least 10 percent in 2014 as
it expects its secure payment solutions systems to gain ground.
Net loss attributable to the company narrowed to $23.9
million, or 22 cents per share, in the quarter ended April 30,
from $58.4 million, or 54 cents per share, a year earlier.
The company said it plans to cut about 500 jobs by end of
2014 from 5,800 at the beginning of calendar year 2014 to lower
costs. "We began executing during Q2, reducing our headcount by
approximately 150 people, thus far," said Chief Executive
Officer Paul Galant during a post-earnings conference call.
"The company was very inefficient in the past. So the CEO
actually thinks that by cutting costs, by making the
organization more efficient, that'll actually contribute to more
revenue growth," said Luria of Wedbush Securities.
In addition, VeriFone said it expects to close 10 of its 129
facilities, liquidate 19 of 132 legal entities and consolidate
20 percent of its data centers, all by the end of 2014 to make
itself more efficient.
On an adjusted basis, the company reported a profit of 37
cents per share.
Revenue rose 9 percent to $466.4 million. Revenue in the
Asia Pacific region rose 36 percent to $67.6 million, and
accounted for over 10 percent of total revenue.
Analysts had expected an adjusted profit of 32 cents per
share on revenue of $443.4 million.
Shares of the company closed at $33.82 on the New York Stock
Exchange on Thursday. The stock has gained about 46 percent
since the Target data breach became public on Dec. 18.
(Reporting by Sampad Patnaik in Bangalore; Editing by Don
Sebastian and Lisa Shumaker)