Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of electronic-payment specialist VeriFone Systems
So what: VeriFone's second-quarter results managed to top expectations, but a disappointing outlook for the third quarter is triggering concerns over its profitability going forward. Management cited foreign-exchange movements as the reason for the lackluster guidance, suggesting that its results are far more vulnerable to currency fluctuations than investors thought.
Now what: Management now sees third-quarter adjusted EPS of $0.68 to $0.70 on revenue of $495 million to $500 million -- versus Wall Street's expectations of $0.70 and $502.2 million -- but also maintained its full-year forecast. "We remain confident in our outlook for the year," CEO Douglas Bergeron reassured investors. "VeriFone is continuing to prove that widespread incumbency combined with market-leading innovation is a winning formula for the payments marketplace." But while today's plunge might offer a decent trading opportunity, VeriFone's still-heavy debt load and exposure to volatile foreign-exchange fluctuations make it a questionable long-term pick.
Interested in more info on VeriFone? Add it to your watchlist.