VeriFone Systems (NYSE:PAY) Revenue, Margins Improve

VeriFone Systems (NYSE:PAY) enjoyed a profit in its latest quarter, generated by improvement in revenue and margins. They also made a bid for e-payment company Hypercom (NYSE:HYC).

Canaccord said, "The credit card swipe machine maker swung to a fourth-quarter profit, beating its own estimates, as revenue and margins improved. VeriFone, whose customers are primarily financial institutions, payment processors, petroleum companies and retailers, said net income was $49.4 million, or $0.55 a share, for August-October, compared with a loss of $2.2 million, or $0.03 a share, in the same period last year. Sales of $276 million were up 27% from last year; in the U.S. and Canada, sales rose 40% to $122.1 million, while revenue from Latin America jumped 52% to $53 million. The company has seen better results of late, helped by strong growth in its services business. As such, VeriFone’s stock has more than doubled this year. It did well on Friday, too, after the company forecast current-quarter earnings of $0.38-0.39 on revenue of $265-270 million, compared with analysts’ views of $0.35 on $260 million. After more than a month of pursuit, VeriFone recently announced that it will buy fellow e-payment company Hypercom (NYSE:HYC) for about $465 million in stock in a deal intended to boost VeriFone’s presence in Europe. At least one investor isn’t happy about this transaction, though, as a suit was filed in the Delaware court yesterday alleging Hypercom has been undervalued. “The offer price reflects an inadequate premium to the trading price of the company’s common stock given that Hypercom continues to have record revenue growth,” shareholder Chad Small in his suit. Whether this will have any impact on the transaction remains to be seen.

Verifone closed Monday at $39.83, losing $0.04, or 0.10 percent.