Feb 24 (Reuters) – Heartland Payment Systems Inc (HPY.N) posted a lower-than-expected quarterly profit, cut its quarterly dividend by 72 percent and said it might incur losses from the recent security breach of its system, sending its shares to a lifetime low.
The company, which provides payment services to banks, said at this point of time it cannot estimate the amount of losses that might be incurred in connection with any claims made against the security breach.
It also forecast 2009 earnings below market expectations and slashed its quarterly dividend to 2.5 cents a share to preserve cash.
Shares of the company fell about 28 percent to touch a low of $5.51. They were down $1.88 at $5.77 in afternoon trade on the New York Stock Exchange.
Net income for the fourth quarter was $8 million, or 21 cents a share, compared with $6.8 million, or 17 cents a share, a year ago. Its quarterly profit, however, fell short of the average analyst’s estimate of 26 cents a share.
Total revenue rose 13 percent to $385.9 million, but was below the market expectation of $397.3 million.
For the full year, the credit-card processing company expects to earn $1.15 to $1.22 a share, which was below analysts’ expectations of $1.23 a share. It sees net revenue of between $430 million and $445 million for 2009.
“Clearly our biggest challenge in 2009 will arise from the system breach we suffered,” said Chief Executive Robert Carr, adding that the company will defend any claims that arise against the breach.
Last month, Heartland reported a system breach and stealing of credit card information by cyber thieves in 2008, and said cardholders would not be held responsible for unauthorized, fraudulent charges made by third parties.