VeriFone CEO Defends Growth Plans
The bears have VeriFone Systems wrong, CEO Douglas Bergeron told CNBC’s “Squawk on the Street” on Thursday.
The stock dropped sharply Thursday morning after the payment solutions company’s quarterly earnings announcement, as Wall Street remains concerned about competition from new entrants into the payment space like Square. (Read More:Will Starbucks, Square Take Mobile Payments Mainstream?)
These concerns were exacerbated after VeriFone cut its fiscal fourth-quarter guidance. The payment company now sees revenue of $495 million to $500 million versus Wall Street forecasts for $519 million and earnings of 75 to 77 cents per share compared with an estimate of 74 cents.
But the company remains confident in its outlook. “We have beach-front property for the mobile payment deployment,” the VeriFone CEO said in the CNBC interview after its earnings.
“VeriFone is very innovative and has opened itself up like Switzerland to all these new payment modalities,” Bergeron said. “But the existing infrastructure that retailers depend on needs to be secure and needs to exist as it is today as a way to both introduce all these new payment methods and keep everything else going.”
Bergeron said the average selling price of its hardware is going up. And by 2015, Visa and MasterCard will introduce credit and debit cards with a computer chip.
“That adds more complexity to the point of sale,” Bergeron said. “We’re very confident of our competitive position and our pricing power in the market.”
He also said the company is on track for revenue to be split equally between hardware and software by 2015. Retailers can no longer rely only on a piece of hardware; they need a total solution — a payment as a service, Bergeron said.
"I'm in for the long-haul; I just bought a bunch of shares a few months ago,” he added. “I think this company is going to do fantastic in the new world of payments."