We noticed a huge surge in activity over at Volume Spike this morning in shares of VeriFone Holdings Inc. (NYSE: PAY). You can thank the company finally giving a positive outlook and its cleaned-up accounting mess that has been a gorilla on its neck.  Verifone makes the point-of-sale terminals used to process credit and debit card transactions which you have likely seen at grocery stores or many other retail outlets.  As you read on, you might even determine that the worst is close to being finished.

The company said said it would earn $0.34 to $0.35 last quarter, whichis above an analyst estimate matrix that; and revenues of $256 to $258million would also be above plan.  VeriFone also replaced its chief financial officer, Barry Zwarensteinby naming Clinton Knowles as Interim-CFO.  The most important aspect,and the one that will let the company go one down the road, is thatVeriFone indicated the worst may finally be over.

The internal inquiry over sales recognition removed a total of $70million in previously reported 2007 profits to get its numbers backin-line as the company had accounting issues over inventoryaccounting.  It also lost $51.5 million during the first half of fiscal2008, compared to a loss of $10.5 million from the same time in 2007.Revenues in the first half fell 2% to $418.5 million.

Shares fell from $50.00 down to almost under $10.00 before therecovery.  This huge gap up is still far short of where manyshareholders had gotten in on one of the recent great growth storiesbefore the rug was yanked out from under them. 

Right after the open, shares are up over 27% at $18.75 on strongvolume.  This should be one of the most actively traded NYSE-listedstocks today. Maybe rehab isn’t just for quitters.

JON C. OGG
August 20, 2008

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