Chip and Pin sales hurt Trinitech profits

TRINTECH, the electronic payments group, has warned revenues will be lower than expected because of a slowdown in demand for Chip and Pin software.

Sales of the technology, designed to make credit card transactions more secure, have been down for some months.

The company said it now expects revenues for the three months to end July, to be in the region of $12.25 million (€9.85m), about 10% lower than expected.

As a result of lower sales, net profits would now be between €80,000-€240,000. Gerry Hennigan, technology analyst at Goodbody Stockbrokers, said yesterday:

"The ongoing contraction in Chip and Pin revenue, which led us to lower our recommendation post Q1 on a 40% sequential contraction in product revenue appears to be at the root cause of the under-performance.

"That said, despite the shortcomings on the Chip and Pin front the underlying business (excluding exceptional charges) remains profitable. Revenue growth remains the key concern."

Trintech said it expects to record a one-off exceptional charge of €3.2m through the extension of warranty periods for certain hardware products deployed in Europe.

Its shares, listed on New York's Nasdaq exchange, slipped by 6.5% to $3.66 in early trading.