Earthport Shares Drop 30 Percent, Plans Announced For New CEO

Cross-border payments company Earthport is on the hunt for a new CEO.

According to reports on Monday (Dec. 18), the company announced its current Chief Executive Officer, Hank Uberoi, will switch to the position of executive chairman on the first of the year. Phil Hickman will serve as interim CEO while the company searches for a replacement. Uberoi, meanwhile, will lead the company into new partnerships and investment initiatives.

News of the leadership change came as Earthport also warned investors of lower-than-expected fiscal year figures, noting that revenue for the current fiscal year could be up to 15 percent lower than current analyst expectations, reports in Alliance News said.

Shares plummeted 31 percent on Monday following the announcement. According to Earthport, the lower revenue is a result of delayed contracts and one contract change with an existing client.

“Many of these contracts and implementations are expected to complete within the current financial year but will result in lower revenues for FY2017,” the firm said in a statement. “In addition, a recent change at one existing eCommerce client has resulted in a loss of approximately 5 percent of 2018 projected revenues, as this client changed its plans for a U.K. corridor for domestic payments for reasons specific to them.”

The firm said it expects to break even in FY2019.

“Despite a temporary setback in revenue growth rates impacting full-year 2018 revenue expectations, Earthport’s pipeline and brand profile has never been better,” Hickman said in a statement. “The market is increasingly open to alternative solutions to correspondent banking, and, as a leader in this field, it is imperative Earthport takes advantage of the many strategic opportunities presented by the current environment.”

Last December, Earthport announced a collaboration with Bank of America Merrill Lynch in which the company integrated its cross-border ACH payment capabilities into Bank of America’s online banking platform CashPro.