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| Wednesday, August 02, 2006 |
CheckFree Corp.'s stock plunged 21 percent in after hours trading on Tuesday after it said customers skipped payments in the latest quarter and posted earnings two cents below analysts' estimates.
CheckFree Chief Executive Pete Kight said in a call to investors that transactions at the company's electronic commerce division had been "soft" in the latest quarter, particularly in April.
CheckFree makes software for online bill-paying and handles bill-payers both electronically and for walk-ins.
He blamed a temporary disruption at its biggest bank customer, fewer billing cycles in that month and reduced walk- in customers.
"Skippers -- people who skip payments -- were clearly up in a tax quarter," said Kight.
He speculated that a high percentage of credit card payments may have been delayed.
Chief Financial Officer David Magnum admitted CheckFree was "surprised" by the April slowdown, but forecast growth would improve in fiscal 2007, based on better results in July.
Atlanta-based CheckFree, which serves more than 1,500 businesses and organizations, said its "underlying earnings," which exclude some acquisition expenses and related tax benefits, were $36.5 million, or 39 cents a share, unchanged from a year earlier.
On that basis, 19 analysts polled by Reuters had on average expected the company to earn 41 cents a share.
Net income rose to $29.4 million, or 31 a share, compared with $11.9 million, or 13 cents a share, in the year-ago quarter.
For fiscal 2007, CheckFree expects earnings of $1.58 to $1.62 a share and $1.90 to $1.94 on an underlying basis, representing 10 percent to 13 percent growth over the 2006 fiscal year.
Revenue was $224.9 million, a 12 percent increase over the year earlier period, when it was $201 billion.
CheckFree's shares fell 21.1 percent, or $9.08, to $34.05 after the close of regular trading. The share closed at $43.13, down $1.37, or 3.1 percent on the Nasdaq market, near the low end of its range for 2006. It traded as high as $56.50 earlier this year.
"We are frustrated and we're going to get to the bottom of it," said Kight. |
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