VeriFone’s Bergeron Out After Outlook Misses EstimatesOlga Kharif
VeriFone Systems Inc. shares rose after Douglas Bergeron was dismissed as chief executive officer, following missed estimates for second-quarter profit amid diminished demand for credit-card terminals.
Chairman Richard McGinn, 66, will become interim CEO, and the board has formed a search committee to assess candidates and enlist a search firm to help find a permanent successor, San Jose, California-based VeriFone said in a statement yesterday. Leslie Denend was named interim chairman. Shares rose as much as 11 percent in extended trading after the announcement.
Bergeron, 52, is the second U.S. technology CEO to exit in less than two weeks after missing projections, following the ouster of Andrew Mason from the top job at daily deals provider Groupon Inc. Bergeron, CEO since 2001, met with VeriFone’s board on March 8, when the decision to replace him was made, said Bergeron, who is also resigning as director.
“It’s serious business when a company misses its numbers,” Bergeron said in an interview. “Clearly, we’ve been extremely successful over the past two years, transforming from products to services. In retrospect, it’s a very hard transition to do cleanly as a public company. We had a miss on numbers.”
VeriFone’s stock tumbled 43 percent a day after issuing the bearish forecast on Feb. 20. The shares rose 6 percent to $21.68 at the close in New York, after advancing as much as 8.4 percent.
VeriFone, which makes makes credit and debit-card accepting terminals that are used in retail stores, gas stations and taxicabs, is facing economic weakness in Europe, lower-than-anticipated sales from customers in Brazil and an increase in deferred revenue from clients in Africa and the Middle East.
Bergeron, who will remain VeriFone’s largest individual shareholder, said the company’s new CEO should pursue the same strategy of generating more revenue from markets outside of the U.S., and focusing on services.
“I’ll be a cheerleader from the outside,” said Bergeron, who said he was considering a new career as an investor or private-equity partner. “There’s a natural rejuvenation that happens with new leadership.”