Vasco Q4 profit falls short of expectations

Vasco Q4 profit falls short of expectations

Shares in authentication technology supplier Vasco have slipped as the company posts fourth quarter earnings below market expectations.

Vasco reported fourth quarter earnings of $481,000, or one cent per share, up from $165,000, or one cent per share, a year ago. The results were a cent short of analysts estimates, causing the company's shares to fall $1.12 to $7.57 in afternoon trading on Nasdaq.

Revenue jumped 50% to $9.3 million from $6.2 million a year ago. Gross profit was up to $6,032,000 or 65% of revenue for Q4, but operating costs increased 28% to $4.5m from $3.5m a year ago.

"The results of the fourth quarter reflect strong growth in our banking market, especially the consumer banking market," says Jan Valcke, Vasco's president and COO. "The fourth quarter included large volume shipments to both our traditional strategic banking customers as well as new banking customers."

For the full year, Vasco reported net income of $3m compared to a loss of $1.7m in 2003. Gross profit was $20.7m or 69% of revenue for the full year 2004, while operating costs of $4.5m were 19% higher than the $12.7m reported a year ago. The vendor says it signed 543 new clients in 2004, including 70 banks.

Vasco said in December that it expects full-year 2005 revenue to be 35% to 45% higher than its 2004 revenues. The firm expects its growth in 2005 to accelerate due to increasing demand for two-factor authentication.

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