MICROS' second-quarter fiscal 2014 results were a mixed bag with
the top line beating the Zacks Consensus Estimate but the bottom
line missing the same. The company also increased its fiscal 2014
revenue guidance. We believe the recent collaborations with
companies like Microsoft, Dell and Intel are expected to boost
MICROS' financial performance, going forward. Also, the recent
acquisitions will give the company a major competitive edge and
strengthen its market position. However, we remain concerned about
the increasing competition from innovative (tablet-based) POS
solutions offered by its peers Square, Revel, Groupon and NCR Corp.
Moreover, the company's European exposure and a sluggish
macroeconomic environment are the other headwinds, going forward.
Thus, we reiterate our Neutral recommendation on MICROS.
Founded in 1977, MICROS Systems Inc. (MCRS) is headquartered in
Columbia, Md. Formerly known as Picos Manufacturing Inc., the
company changed its name to MICROS Systems Inc. in 1978. The
company designs, manufactures, markets, and services enterprise
information solutions for the hospitality and specialty retail
The hospitality industry comprises lodging, table service
restaurants, quick service restaurants, entertainment venues,
business foodservice operations, casinos, transportation
foodservice, government operations and cruise ships.
The specialty retail industry consists of retail operations,
selling directly to consumers, including retailers of clothing,
shoes, food, hardware, jewelry and other specialty items.
The enterprise information solutions comprise hotel information
systems, restaurant information systems and specialty retail
The hotel information systems include property-based management
systems (PMS), sales and catering systems, central reservation
systems (CRS), customer information systems, revenue management
systems and an Internet/Global Distribution System based hotel
The restaurant information systems consist of hardware and
software for point-of-sale (POS) and operational applications, a
suite of back-office applications, including inventory, labor
financial management and certain centrally hosted enterprise
The specialty retail information systems comprise software for
POS, loss prevention, web commerce applications, business
analytics, customer gift cards, electronic payments and enterprise
Apart from these, MICROS Systems offers an extensive array of
other support services. These services include installation,
operator and manager training, on-site hardware maintenance,
customized software development, application software support,
credit card software support, help desk, systems configuration,
network support, consulting and software hosting.
MICROS Systems Inc. operates in the United States/Canada, EAME
(Europe, Africa and Middle East), the Pacific Rim and Latin
America. The company reports under two segments the United
States/Canada and International. By product mix, Service
represented 67.5% of total revenue in fiscal 2013. Hardware
accounted for 21.2% of total revenue and Software contributed the
MICROS operates in a highly competitive environment. In the food
and beverage marketplace the company faces competition from NCR,
Panasonic, and Par Technology. In the hotel segment it faces
competition from the likes of Agilysys and Multi-Systems. Some of
the competitors in the retail segment comprise of companies such as
Escalate Retail, Red Prairie, Oracle, and SAP.
MICROS Systems Inc. (MCRS): Read the Full Research
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