How Did Verifone Systems Perform in 4Q16?

Price movement

Verifone Systems (PAY) has a market cap of $2.0 billion. It rose 8.6% to close at $17.85 per share on December 13, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 6.9%, 8.4%, and -36.3%, respectively, on the same day.

PAY is trading 5.0% above its 20-day moving average, 10.0% above its 50-day moving average, and 14.9% below its 200-day moving average.

How Did Verifone Systems Perform in 4Q16?

Related ETF and peers

The Schwab US Broad Market ETF (SCHB) invests 0.01% of its holdings in Verifone Systems. The YTD price movement of SCHB was 13.5% on December 13.

The market caps of Verifone’s competitors are as follows:

  • PayPal Holdings (PYPL) — $47.5 billion
  • Global Payments (GPN) — $11.0 billion
  • NCR Corporation (NCR) — $5.2 billion

Performance of Verifone in fiscal 4Q16

Verifone Systems (PAY) reported fiscal 4Q16 total net revenues of $464.2 million, a fall of 9.7% compared to total net revenues of $514.1 million in fiscal 4Q15. Net revenues from North America and Asia-Pacific fell 27.3% and 16.2%, respectively, in fiscal 4Q16 compared to fiscal 4Q15.

Plus, PAY’s net revenues from Latin America and EMEA (Europe, Middle East, and Africa) rose 8.8% and 10.2%, respectively, in fiscal 4Q16 compared to fiscal 4Q15. The company’s gross profit margin narrowed 390 basis points in fiscal 4Q16 compared to fiscal 4Q15.

Its net income and EPS (earnings per share) fell to -$4.5 million and -$0.04, respectively, in fiscal 4Q16 compared to $38.2 million and $0.33, respectively, in fiscal 4Q15. It reported non-GAAP[1. generally accepted accounting principles] EPS of $0.30 in fiscal 4Q16, a fall of 38.8% compared to fiscal 4Q15.

Fiscal 2016 results

In fiscal 2016, PAY reported total net revenues of $2.0 billion, a fall of 0.42% YoY (year-over-year). The company’s gross profit margin and operating margin narrowed 140 basis points and 370 basis points, respectively, in fiscal 2016.

Its net income and EPS fell to -$9.3 million and -$0.08, respectively, in fiscal 2016 compared to $79.1 million and $0.68, respectively, in fiscal 2015. It reported non-GAAP[1. generally accepted accounting principles] EPS of $1.66 in fiscal 2016, a fall of 9.3% compared to fiscal 2015.

Verifone’s cash and cash equivalents fell 29.0%, and its inventories rose 35.1% in fiscal 2016. Its current ratio fell to 1.41x, and its debt-to-equity ratio rose to 1.9x in fiscal 2016, compared to a current ratio and a debt-to-equity ratio of 1.45x and 1.6x, respectively, in fiscal 2015.

Projections

Verifone Systems (PAY) made the following projections for fiscal 1Q17:

  • GAAP net revenues: $446.0 million
  • non-GAAP net revenues: $450.0 million
  • non-GAAP EPS: $0.20

The company has made the following projections for fiscal 2017:

  • GAAP net revenues: $1,895,000–$1,910,000
  • non-GAAP net revenues: $1.90 billion to ~$1.92 billion
  • non-GAAP EPS: $1.35–$1.39

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