Gemalto cuts profit forecasts on weak U.S. business

Reuters News
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Posted: Mar 22, 2017 2:43 AM

(Reuters) - Dutch digital security firm Gemalto lowered its forecasts for first-quarter revenue and full-year profit due to its payments business in the United States, the company said on Wednesday.

Gemalto said it expected first-quarter revenue to fall 7 percent to 9 percent from a year earlier, at constant exchange rates. Annual revenue at its payments business would be about 100 million euros ($108 million) lower than initially expected, it said in a statement.

"This update primarily reflects a double-digit decline in our assumption for the payment cards total available market in the United States," Gemalto said.

French transactions systems firm Ingenico cut its full-year targets in September following a slowdown in sales after a relaxation of U.S. requirements for chip-enabled payment cards, which has slowed the pace of adoption.

Gemalto now expects annual profit from operations to be similar to 2016 levels, when it made an annual profit of 453 million euros. The company had previously forecast annual profit for 2017 in the 500 million to 520 million euro range.

The Netherlands-based company said it was reviewing its action plan and would provide further details in its first-quarter trading update at the end of April.

(Reporting by Wout Vergauwen; editing by David Clarke)