VeriFone Systems Inc (PAY) reported revenues of $410.7 million in the fourth quarter of fiscal 2011, up 48.8% year over year and up 29.6% sequentially.
Based in San Jose, California, VeriFone designs, markets and services a transaction automation system that facilitates electronic payments between consumers, merchants and financial institutions.
Excluding amortization of step-down in deferred revenue on acquisition, revenues came in at $415.6 million, up 50.6% y/y and up 31.1% q/q.
On a segment basis, System Solutions generated revenues of $319.2 million, up 39.8% year over year. Services revenues grew 91.9% year over year to $91.5 million.
North America sales were down 5% year over year. Sales from international operations grew 95% year-over-year. Latin American sales were once again at record levels, with particular strength in Brazil. In Europe, the Middle East and Africa, revenues grew 60% on a year-over-year basis, and 15% sequentially.
Gross margin (excluding stock-based compensation and one-time items) came in at 40.0% compared to 43% in the prior quarter and 40% in the year-ago quarter. Including these items, gross margins came in at 31% compared to 42% in the previous quarter and 38% in the year-ago quarter.
For full year 2011, gross margin came in at 42% compared to 39% in fiscal 2010.
Operating margin came in at 17.8% compared to 19.1%in the previous quarter and 17.6% in the year-ago quarter.
Net income came in at $198.8 million or $1.84 per diluted share compared to net income of $49.5 million or $0.55 in the year-ago quarter and net income of $26.3 million or $0.29 in the previous quarter.
Excluding one-time charges but including stock-based compensation expense, net income was $0.44 per share, in line with the Zacks Consensus Estimate.
VeriFone exited the quarter with cash and equivalents of $594.6 million, up from $584.million at the end of the previous quarter.
Outlook
VeriFone updated its guidance assuming the pending Point acquisition closes at the end of this month. For the first fiscal quarter, VeriFone expects to report net revenues between $415 million and $420 million. Excluding stock-based compensation, net income per diluted share is projected between $0.50 and $0.52.
For fiscal 2012, VeriFone expects to report net revenues between $1.90 billion and $1.92 billion. Excluding stock-based compensation, net income per diluted share is projected between $2.53 and $2.60.
On November 14, 2011, VeriFone signed definitive agreement with Northern Capital to acquire Point, which provides payment and gateway services and solutions for retailers in Northern Europe. Management expects to close the acquisition by the end of 2011.
The results did not impress investors as shares lost 3.01% in after-hours trading to close at $40.55.
