Ingenico shares slump on US sales warning
06 September 2016 | 4953 views | 0
Shares in French eftpos terminal supplier Ingenico slumped in early morning trading after the firm revised revenue guidance due to a "sudden and significant decline" in US sales.
Ingenico cut organic revenue growth prospects for the year from 10% to seven percent, citing a sales slowdown in the US and difficult macroeconimic conditions in the Brazillian market. The warning caught investors by surprise, who moved swiftly to offload the stock causing a 14% fall in the vendor's share price.
Ingenico's statement follows a similar warning from US terminal vendor Verifone, which last week cuts sales and profitability forecasts citing weakening demand.
US sales account for ten percent of Ingenico's profits, in a market which has been buoyed by a wholesale conversion to EMV chip technology.
Ingenico says it now anticipates "a strong decline in sales" for this country in the second half of 2016.
"This market decline has been caused by a relaxation in the EMV rules," says Ingenico. "The result of this is a slowing down in the pace of adoption of EMV technology, of which Ingenico Group is one of the main providers. The relaxation of the rules is temporary, and Ingenico Group remains confident in the continued roll-out of EMV in the United States which should continue to progress in 2017 and beyond."
With the exception of Brazil, the firm says it is performing well in all other geographies.
Ingenico chief Philippe Lazare comments: "The elements which have come at the same time have led us to take a more prudent approach to our objective for the end of this year. This temporary situation, to which we are giving our fullest attention, does not in any way affect the fundamentals of our strategy and the objectives which we have laid out for 2020."