Boston, MA 03/12/2014 (wallstreetpr) – VeriFone systems Inc. (NYSE:PAY) has seen a resurgence in the market after providing an impressive guidance outlook for its second quarter as well as reporting impressive Q1 earnings. VeriFone systems expects to report earnings per share of between 30 cents and 32 cents against consensus estimates of 27 cents. VeriFone systems first quarter earnings per share beat consensus estimates coming in at 20 cents per share although it was a decline 52% compared to that of the same quarter last year.
Q1 Results
VeriFone systems revenue for the first quarter was up by 1.8% compared to the same quarter a year ago coming in at $437.1 million against estimates of $429 million. System solutions revenues were down by 7.3% with service revenues increasing by 19% to $175 million compared to that of the first quarter of 2013.
VeriFone systems revenues in North America markets were down by 8% coming in at $122.1 million with revenues of South America markets also slumping by 6.3% to come in at $68.4 million. Revenue from Africa Europe and Middle East markets on the other hand were up by 7.6% coming in at $186.3 million.
VeriFone systems gross margin contracted by 110 basis points to 42.3% with operating expenses surging by 560 basis points to 34.8%. The company’s operating income was down by 43.3% coming in at $37.5 million mainly as a result of lower gross margin base and increased operating expenses.
VeriFone systems cash and cash equivalent as of the end of the first quarter stood at $249.3 million compared to a high of $268.2 million for the same quarter last year. Total debt slightly dropped to a low of $1 billion down from a high of $1.04 billion. The company’s cash flow from operations stood at $31.9 million compared to a high of $55 million in the previous quarter.
VeriFone Systems Q2 Outlook
VeriFone systems expects non-GAAP revenue for the second quarter to come in the range of between $440 and $445 million which will consequently be an improvement of 4% sequentially. Operating expenses for the quarter should be approximately $135 million a decline of 11.2% sequentially.
Free cash flow for the quarter should come in at $25 million, VeriFone systems expects full year revenue to range in the high margins of $1.78-$1.81 billion higher than the previously given outlook of between $1.77-$1.80 billion.
