(Photo Credit: Mike Mozart)

Electronic payment transaction processing company VeriFone Systems (PAY) is set to report earnings for its third fiscal quarter of 2014 before the market opens on Thursday, September 4.

Shares of VeriFone have been marching higher since June of 2013, and the company has now linked together 3 consecutive quarters of stronger than expected earnings.  

VeriFone’s recent financial performance has been enough to keep investors pleased, but earnings have declined in each of the previous 6 quarters on a year over year basis. Revenue has also slipped in 3 periods over the same 18 month stretch.

Although earnings have been falling compared to last year, quarter to quarter changes have improved drastically relative to 2013. Last year VeriFone’s earnings decreased over 3 subsequent quarters following the 4th fiscal quarter of 2012. This year the payments processing company has bucked the trend, showing 3 periods in a row of quarter over quarter growth.

The revenue chart at VeriFone shows a similar story. While the bottom line was largely in decline in 2013, so was revenue. One key difference is that over the past 2 quarters VeriFone has reported modestly increasing revenue despite falling profits. In June VeriFone reported revenue of $467 million, widely defeating the consensus fromEstimize which had forecast $447.39 million.

The 4.38% sales beat represents VeriFone’s second largest revenue victory relative to market expectations over the past 2 years. The only quarter in which VeriFone performed better relative to the market’s expectations was in the third quarter of last year when shares jumped 10% higher on a 4.5% revenue beat. On Thursday VeriFone will hope to replicate the success reported last September.

Contributing analysts on Estimize are predicting that VeriFone will report earnings of 37 cents per share and revenue of $466.56 million. The Estimize community is forecasting that VeriFone will beat the Wall Street consensus of 35 cents per share and $460.36 million by a margin of 2 cents per share (5.7%) and $6.2 million (1.3%) respectively.

Market expectations going into VeriFone’s third quarter report are considerable higher than what the Wall Street consensus implies. However, VeriFone is about to face increased competition from Amazon’s newly unveiled Local Register card reader and rumors abound that Apple will be partnering with American Express to incorporate a new mobile payments processing system in the iPhone 6. VeriFone has seen a nice run up in its stock price over the past year and a half, but recent reports suggest that the company will need to adapt to a changing mobile payments landscape sooner rather than later.

Other mobile payments systems including Square Cash, Venmo, PayPal, and Bitcoin have all struggled to achieve that mass adoption necessary for a credit card alternative to take off. But that doesn’t mean you should bet against Apple.

The near field communication (NFC) technology that Apple is believed to be using is nothing new, but don’t ever discount Apple’s execution. Apple is called the most innovative company in consumer retail for good reason. If anyone can achieve mass adoption of a new consumer technology like mobile payments, its Apple.