Verifone revenue 2014

Verifone Earnings Call Slide ChartVeriFone Systems proved its turnaround efforts are on track, after the electronic payment services company reported better-than-expected results for its fiscal fourth quarter and full year after the bell on Tuesday. But investors should carefully weigh the risks in this name going forward, as VeriFone's about-face could take some time to play out.

For the quarter, VeriFone posted a profit of $0.27 per share, which was a penny ahead of analyst forecasts for earnings per share of $0.26 in the period. Fourth-quarter revenue of $431 million also topped estimates. But it was a 12% decline from the year-ago period, in which VeriFone reported net revenue of $489 million.

While VeriFone's latest results topped estimates, the company forecast weak earnings for its first quarter of fiscal 2014. VeriFone now expects first-quarter earnings per share of $0.26 and revenue between $425 million and $430 million. This is well below analysts' estimates for earnings of $0.32 per share in the quarter. VeriFone also guided lower for full-year fiscal 2014. On this front, the company anticipates net revenue of between $1.77 billion and $1.8 billion, and non-generally accepted accounting principles earnings of $1.35-$1.40 per share. This compares to the Street's prediction for adjusted EPS of $1.59 on revenue of $1.78 billion in fiscal 2014.

Let's take a closer look at a few key takeaways from VeriFone's earnings call yesterday, which helped shed light on both the challenges and catalysts for the company going forward.

Strengths and weaknesses by business segment
Double-digit declines in revenue continue to threaten VeriFone's reputation with investors. In fact, VeriFone's systems-solutions business saw revenue drop 23% in its latest quarter from the prior year. On the conference call, the company said it is addressing these declines by investing more in next-generation products and making improvements in its product-certification processes. In 2014, VeriFone plans to increase research and development spending in order to bring new products to market faster.

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