NCR Delivers Modest 4Q - Analyst Blog
11 Février 2013 - 3:07PM
Zacks
NCR Corp. (NCR) posted fourth-quarter 2012
earnings per share (EPS) of 72 cents, which surpassed the Zacks
Consensus Estimate of 69 cents.
Revenue
NCR reported revenues of $1.64 billion in the fourth quarter, up
2.6% from $1.60 billion in the year-ago quarter. Total revenue was
positively impacted by the solid year-over-year increase in
Hospitality segment, supported by marginal increases in Retail
Solutions and Financial Services segments. This was partially
offset by double-digit decline in Emerging Industries segment.
Financial services reported revenues of $912.0 million, up 0.4%
from $908.0 million in the year-ago quarter. In Financial Services,
the company is continuously gaining market share on a national
level, and the growth of this segment is fueled to a considerable
extent by some previous acquisitions.
Retail solutions revenue was up 2.0% year over year to $490.0
million in the quarter. The company witnessed a good quarter in
retail, with growth in both orders and backlog.
The Hospitality segment’s revenue increased a robust 42.9% from
the year-ago quarter to $150.0 million in the reported quarter. All
the segments such as Hardware, Software and SaaS experienced
growth.
The Emerging Industries segment reported revenues of $90.0
million, down 16.0% year over year. The decline in revenues was
driven primarily by a decrease in revenues in the Americas and
Europe theaters.
Operating Results
Gross margin in the quarter was 20.2% versus 24.0% in the
year-ago quarter. The year-over-year downside in gross margin was
fueled by higher product and services cost.
NCR reported a net loss of $22.0 million or 14 cents per common
share in the reported quarter, compared with $12.0 million or 37
cents per diluted share in the year-ago quarter. Excluding special
items like impairment, pension expense, acquisition related
transaction cost, amortization and legal settlement charges;
non-GAAP income from continuing operations was 72 cents per share
compared with 66 cents per share in the prior-year quarter.
Balance Sheet & Cash Flow
Net cash provided by operating activities was $100.0 million
during the fourth quarter of 2012, down from net cash generation of
$274.0 million in the year-ago period. Cash from operating
activities was negatively impacted by additional pension
contributions.
NCR ended the quarter with $1.07 billion in cash and cash
equivalents versus $581.0 million as of Sep 30, 2012.
Guidance
NCR expects its full-year 2013 revenue to increase in the range
of 9.0% to 11.0%. Income from operations is expected in the range
of $548.0 to $563.0 million. GAAP EPS is expected in the range of
$2.06 to $2.16, while non-GAAP EPS is expected in the range of
$2.65 to $2.75.
Recommendation
NCR reported modest fourth-quarter results, with revenues
improving across most of its business segments, and EPS surpassing
the Zacks Consensus Estimate. Higher volumes helped the company,
while higher costs led to lower gross margin.
The company provided a decent fiscal 2013 guidance and believes
that it is well positioned to generate good business volume in
fiscal 2013. The company faces strong competition from
Diebold (DBD).
Currently, NCR Corp. has a Zacks Rank #3 (Hold). Investors can
also consider other technology stocks such as Symantec
Corp. (SYMC), which carries a Zacks Rank #1 (Strong Buy),
and CA Inc. (CA), which has a Zacks rank#2 (Buy
rating).
CA INC (CA): Free Stock Analysis Report
DIEBOLD INC (DBD): Free Stock Analysis Report
NCR CORP-NEW (NCR): Free Stock Analysis Report
SYMANTEC CORP (SYMC): Free Stock Analysis Report
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