Ahead of the Bell: VeriFone Systems
Shares of VeriFone Systems rise in premarket on strong 3rd-qtr results, solid outlook
NEW YORK (AP) -- Shares of VeriFone Systems Inc., which makes terminals for electronic payments, rose in premarket trading Friday, a day after the company reported a loss for its fiscal third quarter. Its adjusted results beat Wall Street predictions.
In premarket trading, VeriFone shares rose $1.41, or 6.8 percent, to $22.13.
The San Jose, Calif.-based company also issued a strong guidance for the current period, which ends in October, saying that it expects to post a profit of 25 cents per share, which would match the current average estimate of analysts surveyed by FactSet.
Revenue is expected to total between $418 million to $422 million, ahead of analysts' expectations of $411.8 million.
VeriFone also said the first quarter of fiscal 2014 should show "modest" growth over the October-quarter results.
The optimistic guidance prompted Wedbush analyst Gil Luria to boost his rating for the stock to "Outperform" from "Neutral." He also boosted his price target by $11 to $26.
"We believe VeriFone is on track to overcome its legacy issues, return to growth and deliver normalized profitability in fiscal year 2015, leading to substantial earnings per share and free cash flow growth and share appreciation," Luria wrote in a note to investors.
Jefferies analyst Jason Kupferberg backed his "Hold" rating for VeriFone shares, saying that while the recent quarter's results show progress, the company is "not out of the woods yet."
Earlier this year, VeriFone said it had failed to tailor products to the needs of merchants and the sales staff was underperforming. The longtime CEO, Douglas Bergeron, stepped down and was replaced on an interim basis by Chairman Richard McGinn, who remains in that role.
