NEW YORK (AP) — Shares of Verifone Systems Inc. tumbled more than 11 percent before the market open on Thursday as problems in the company’s Brazilian operations weighed on revenue in its latest quarter and on its forecast for the current period.
On Wednesday Verifone reported fiscal third-quarter revenue rose 54 percent to $489.1 million, with gains across its business lines and in all markets except Latin America. But analysts surveyed by FactSet forecast $498 million in revenue.
For the current quarter, which ends in October, the company anticipates revenue between $495 million and $500 million. Wall Street predicts $521 million.
The company’s adjusted net income during the quarter and in its forecast topped average analyst estimates, however.
The revenue misses were mostly because of a fire at a plant in Brazil and some product delays, said Citi Investment Research’s Philip Stiller in a client note. These issues might take a while to work out, but Stiller said that Verifone’s underlying growth trends remain encouraging as electronic payments increase, especially in developing countries.
The analyst lowered Verifone’s price target to $47 from $55 but kept his “Buy” rating on the shares.
Wedbush’s Gil Luria said that the Brazil fire likely cost the company $10 million in the third quarter and that an additional $25 million fire-related loss prompted the weak fourth-quarter guidance. Luria rates Verifone “Neutral.”
Verifone’s stock dropped $3.80, or nearly 11 percent, to $31.58 in premarket trading. Shares are nearly unchanged in 2012.