Please ensure Javascript is enabled for purposes of website accessibility

Verifone's Efforts Pay Off

By Keki Fatakia – Updated Nov 7, 2016 at 4:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Verifone's fourth-quarter revenues and profits soar.

Verifone (NYSE: PAY), the secure electronic payment solutions company, declared a great set of fourth-quarter results that exceeded analyst expectations. Let's take a closer, Foolish look at how Verifone's moves paid off.

Paving its way to success
The San Jose, Calif.-based company witnessed an exciting fourth quarter as profits nearly quadrupled from the year-ago period to $198.8 million. The huge jump in profits was mainly due to an income tax benefit that the company enjoyed to the tune of $205.1 million and 50% higher revenues of $410.7 million. However, if you exclude extraordinary items like the income tax benefit, the company's profits still rose by 57.9% to $57 million from the previous year's adjusted fourth-quarter profit.

Verifone's business has been booming across most geographical regions. In complete defiance of the European debt crises, the company's combined revenue from Europe, Middle East, and Africa more than doubled from the year-ago quarter to $148.6 million. Verifone's Latin American operations also saw revenues zoom 94.1% to 104.6 million, while Asia saw 40.3% higher revenues. However, revenues from Canada declined by 5.3% to $115.7 million.

Spreading its wings
Verifone's fourth quarter was certainly quite busy with two acquisitions under its belt. 
In November, Verifone announced its acquisition of Global Bay Mobile Technologies, a provider of next-generation mobile retail solutions. The company said that the acquisition would enhance Verifone's initiatives to bring the smartphone- and tablet-based shopping and payment experience to retail businesses. This would certainly be helpful, especially at a time when smartphones and tablets like the Apple iPhone and iPad are the craze.

Besides that, back in August, the company finalized its acquisition of Hypercom, a manufacturer of point-of-sale terminals. The company said that the acquisition of Hypercom would complement its business and Verifone would try to enhance all of Hypercom's product lines under the Verifone brand itself.

Come rain or shine...
The company was also busy lapping up key partnerships during the quarter. For example, Verifone entered into a partnership with Visa (NYSE: V) to increase installations of in-taxi payment and media systems in London before the Olympic games in 2012. The deal has led to the signing up of nearly 7,000 cabs for a five-year agreement. Verifone anticipates installation of 10,000 credit card terminals before the commencement of the Olympics.

Verifone's strategic relationship with Google (Nasdaq: GOOG) also bore fruit during the quarter, as the Google Wallet mobile payment system now boasts approximately 40,000 Verifone retail lanes across the country with NFC capability. NFC, or near-field communication, is a feature present mainly in the latest range of smartphones that can be used for making payments instead of using the traditional swipe of a credit card. The company is also in talks with Verizon (NYSE: VZ), AT&T (NYSE: T), and T-Mobile's joint venture, Isis, along with Paypal for plans slated for 2012.

The Foolish bottom line
Verifone seems to be making all the right moves with its partnerships and acquisitions. Going forward, I feel that Verifone stands to gain immensely through its ongoing partnerships, which would continue to boost the company's top-line growth. So what do you Fools think of Verifone? Leave your comments in the box below. Also, don't forget to stay up to speed with Verifone's latest money-spinning deals by adding it to your very own watchlist. It's free and lets you stay on top of the latest news and analysis for your favorite companies.

Keki Fatakia does not hold shares in any of the companies mentioned in this article. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Visa and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

None

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

VeriFone Systems, Inc. Stock Quote
VeriFone Systems, Inc.
PAY
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$39.52 (-1.03%) $0.41
AT&T Inc. Stock Quote
AT&T Inc.
T
$16.01 (-1.42%) $0.23
Visa Inc. Stock Quote
Visa Inc.
V
$183.96 (-0.98%) $-1.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.