The company this morning reported a profit of $11.2 million, or 43 cents a share, for the three months ended June 30, up from $8.8 million, or 36 cents a share, in last year's second quarter.
Revenues of $125 million were up 31.7 percent from $94.9 million a year earlier.
VeriFone's stock closed at $41.121/2 on the New York Stock Exchange today, up $4.25, or 11.5 percent, from yesterday.
Analysts say that VeriFone's fall from a peak of $51.75 on May 24 to $36.871/2 yesterday was a result of an overall market correction and a dislike for technology stocks based on poor earnings at other companies.
Analysts who follow the company view VeriFone as a strong business, ideally placed to be a leader in Internet financial technology without risking its strong core business, transaction verification systems such as credit card readers in retail stores.
"They have real growth prospects, not only in their original business but also in the Internet," said Jennifer Scutti, researcher with Prudential Securities in New York.
"One of the things I like about them is that they have a good solid core business, not even including anything with the Internet right now," Scutti said. She rates it a "buy."
Eugene Glazer of Dean Witter Reynolds in New York agreed. "We basically have a solid stance on it," he said. "They are the dominant players in the systems for credit card authorization and verification."
Glazer said it is significant that most of VeriFone's growth is from international business and it is positioned as a leader able to apply credit verification and transaction security to the Internet.
VeriFone is not like so-called "pure" Internet companies that are basing their whole future solely on their Internet potential, he said. "It's a real company that makes real money now based on existing systems."
Richard Dole, of the Honolulu firm of Fry & Co., added: "It's a great company. It's staying ahead of its technology and it's responding to market needs in one basic product area, transaction processing devices. It's a buying opportunity.
"We're looking for them to earn $1.60 to $1.65 this year, against $1.32 last year, and $2 next year. We're looking for VeriFone to grow at a rate of 20 percent a year over the next five years," Dole said.
VeriFone said today that its second-quarter U.S. revenues were up 25.5 percent at $75.4 million and international revenues were up 42.6 percent at $49.6 million.
The company has been buying its own shares on the market and in the first half of this year repurchased 355,200 shares for $16.9 million.
During the latest quarter, the company unveiled its Secure Electronic Transactions system to handle payments through the Internet and it was endorsed by major banks and credit card companies.