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 VeriFone Systems (NYSE:PAY) rose more than 10% Friday after the electronic-payment specialist released solid fiscal third-quarter results.
So what: Quarterly adjusted net revenue decreased 15% year over year, to $418 million, which translated to adjusted net income per diluted share of $0.24. However, analysts on average were expecting adjusted earnings of only $0.20 per share on sales of $400.33 million.
In addition, VeriFone provided in-line fiscal fourth-quarter guidance for non-GAAP net income per share of $0.25, and adjusted revenue of $418 million to $422 million, which easily exceeded analysts' estimates, which called for sales of $411.85 million.
Now what: Interim CEO Richard McGinn expressed excitement for the company's recent acquisition of New Zealand-based ENZ, and went on to state, "Our revenues and earnings exceeded our guidance, cash flow exceeded our expectation, and we paid down $160 million of debt, bolstering our financial position."
In addition, he noted third-quarter Services revenue rose 17% from a year ago, and even as the company paid down debt, they've continued to increase investments in R&D and infrastructure, which should bolster their industry position going forward. As a result, though shares currently trade for a whopping 137 times last year's earnings, they might still prove to be a bargain down the road considering that the earnings multiple falls to 15 times using next year's estimates.
Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.