Lipman Q3 profit falls 19%

Lipman Electronic Engineering's third-quarter net profit slumped 19% to $7.8m. from $9.6m. a year earlier due to weak earnings at its Dione unit in the UK.

Lipman Electronic Engineering's third-quarter net profit slumped 19% to $7.8m. from $9.6m. a year earlier due to weak earnings at its Dione unit in the UK. The Rosh Ha'ayin-based company, which manufactures electronic-payment equipment, said on Monday that in the three months ending on September 30 earnings per diluted share fell to 28 cents from 35 cents but that revenue jumped 22% to $54.1m. Analyst expectations for EPS ranged from 20 cents to 23 cents and revenue estimates ranged from $51.88m. to $52.06m., as compiled by Thomson Financial Network. Despite the fall in profits, Lipman President and CEO Isaac Angel said the company's primary businesses would continue to expand. "Our core business remained strong and we are on track for organic growth of approximately 20% this year," he said. In the first nine months of the year, net income fell to $20.4m. from $21m., diluted EPS fell to 74 cents from 80 cents and revenue surged 45% to $166.6m. Although Dione's results hurt Lipman's profitability, the consolidation of the unit's results boosted overall group revenue, as did increased sales in the US and Latin America. Lipman bought Dione in October last year for an initial $69m., but the company's performance has been weaker than expected due to a significant slowdown in the UK point-of-sale terminal market and because it unexpectedly failed to close several European orders in the third quarter. As a result Lipman cut its 2005 forecasts in September and sacked Dione chief executive Shaun Gray, replacing him with the unit's founder and chief technology officer, Ricky Garrido, on a temporary basis. Lipman expects 2005 diluted EPS of between 88 cents and 98 cents and revenue of between $230m. and $240m. Shares fell 2.3% to $23.36 in morning trading on Nasdaq despite rising 4.5% to NIS 114.40 on the Tel Aviv Stock Exchange.