) is scheduled to release its first quarter 2012 results on April
19, 2012 and we see some variation in the analysts' estimates at
Fourth Quarter Recap
The company reported fourth quarter 2011 earnings per share (
) of 65 cents, surpassing the Zacks Consensus Estimate of 57
Revenue generated during the fourth quarter was $1.64 billion,
up 16.7% from $1.40 billion in the year-ago quarter. Global orders
grew 24.0% annually and helped the company maintain a strong
backlog entering into 2012.
NCR reported fourth quarter net loss from continuing operations
of $13.0 million or 8 cents per diluted share compared to profit of
$33.0 million or 20 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
65 cents per diluted share compared with 56 cents per diluted share
in the year-ago quarter.
The company expects full-year 2012 revenues to increase in the
range of 11.0% to 13.0%. GAAP diluted earnings per share are
expected in the range of $1.48 to $1.55 and non-GAAP diluted
earnings per share, excluding pension expense and special items, in
the range of $2.40 to $2.47 per diluted share.
Agreement of Analysts
There were no estimate revisions for the March quarter over the
last 30 days. Out of the seven and six analysts providing estimates
for fiscal year 2012 and 2013, respectively, 3 analysts have
revised their upward for the fiscal year 2012, while three analysts
have made an upward revision in estimate for the fiscal year 2013
over the last 30 days.
Analysts are of the opinion that NCR will benefit from the US
bank ATM upgrade cycle, which is expected to result in new wins at
Radiant and new product introductions. Moreover, after conducting
thorough industry checks, analysts have formed an opinion that U.S.
banks, of different sizes, will continue with their existing
spending pattern on ATMs, fueled by a deposit automation upgrade
Some analysts are also of the opinion that the ATM Industry
Preview, and large ATM manufacturers like NCR Corporation and
Diebold, Incorporated are likely to benefit from strong momentum
among different banks, as banks are focusing on better security
needs and ADA compliance.
Furrther, the ATM major is also generating significant growth in
Latin America. Analysts also expect that unit volumes in Asia are
trending positively as emerging market demand is slowly
On the other hand, NCR's sales are affected by seasonality, with
the first quarter bringing lower revenue and the fourth quarter
generating higher revenue each year. Such seasonal nature of the
business leads to fluctuation in cash flows and makes it difficult
for the company to determine working capital requirements. These
factors hinder the company's outlook and negatively affect its
ability to project financial results accurately.
Magnitude of Estimate Revisions
The magnitude of revisions for the first quarter of 2012 is
minimal, since the company reported a decent fourth quarter
results. Overall, the Zacks Consensus Estimates for the upcoming
quarter have moved up 10 cents over the last 90 days to 47 cents,
while it improved by 11 cents over the past 30 days.
The estimate for fiscal 2012, improved by 23 cents over the last
90 days, while for 2013 estimates have moved up by 21 cents over
the last 90 days.
NCR reported decent fourth quarter results, with revenues
improving across most of its business segments and geographical
regions. We are encouraged by the fiscal year guidance, and believe
that the company is well positioned to deliver solid momentum
across all its businesses.
Although the company witnessed improvement in revenue, it
incurred a loss from continuing operations. Although the
restructuring initiatives have begun impacting the results and
demand is picking up, we believe that the company should take
necessary measures to improve its operating performance.
The company has a Zacks #2 Rank, implying a short-term Buy
NCR CORP-NEW (
): Free Stock Analysis Report
To read this article on Zacks.com click here.