Secure electronic payment solutions provider, VeriFone Systems Inc. (NYSE: PAY) announced fiscal first-quarter results late on Tuesday which showed both earnings and revenue edging past Street’s estimates, thanks to higher margins and strong service revenue growth. Shares rallied in afterhours trading as the company swung back into profit in fiscal first quarter; however, the outlook on the full-year disappointed investors.
The Company downwardly revised its full year earnings outlook to $1.90 a share to $2.10 a share on estimated revenue of $1.8 billion to $1.83 billion from earlier guidance of earnings of $3.25 a share to $3.30 a share on revenue of $2.05 billion to $2.1 billion. However, the Company maintained its outlook on the current quarter.
For the fiscal first quarter ended January 31, the San Jose, California-based Company reported a profit of $11.8 million, or 11 cents a share, compared to a loss of $3.1 million, or 3 cents a share.
Stripping out one-time items such as stock-based compensation, acquisition related and restructuring costs and some other charges, adjusted earnings or non-GAAP earnings came at 51 cents a share compared to 58 cents, in the year earlier quarter.
Revenue during the period rose 2.2% to $428.7 million but after adjusting deferred settlements, revenue only increased by 1% to $429.7 million.
Analysts’ consensus estimate was for earnings of 48 cents a share on revenue of $426 million.
The quarter one adjusted results also bettered company’s own previous guidance. Earlier in January, the company provided earnings guidance of 47 cents to 50 cents a share on adjusted revenue of $425 million to $430 million.
Gross margin improved to 40.1% from 37.3%, in the same period of last fiscal.
While revenue from the services segment climbed 38%, revenue from products, which accounts for the most part of company’s total revenue, declined 9.9%.
Shares rallied almost 4.50% in afterhours trading.