NCR Corp. (NCR): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We downgrade our recommendation on NCR to Underperform as the company lowered the fiscal 2014 revenue guidance anticipating lower revenue growth across its business segments, especially Retail segment. Also, the company reported year-over-year decline in third-quarter earnings. Continued investments in business to provide new and differentiated products could also impact margins in the near term, coupled with softness in the ATM business in mature markets and a high debt burden, remain the concerns going forward. However, continuous product launches, growing popularity of its self-service offerings and synergies from acquisitions are the catalysts. NCR's deal wins across its business segments also prove beneficial for the company's top line.

Overview:

Founded in 1884 and headquartered at Duluth, GA, NCR Corporation (NCR) and its subsidiaries provide technological solutions (both products and services) to help organizations connect, interact and transact with customers and solidify customer relationships. NCR serves customers in financial services, retail, hospitality, travel, and telecommunications and technology industries.

NCR's product offerings include automated teller machines (ATMs), self-service kiosks and point of sale (POS) devices, as well as software applications that help in interaction and business transaction through computers or mobile devices. NCR's products are complemented by a portfolio of services.

NCR has four reportable operating segments: Financial Services, Retail Solutions, Hospitality (formerly known as Hospitality and Specialty Retail) and Emerging Industries, which includes Travel & Gaming, Healthcare, and Telecom & Technology lines of business. NCR sold its Entertainment business to Redbox Automated Retail, LLC.

The broad range of products includes ATMs, cash dispensers and software solutions (like APTRA self-service ATM software application suite, cash management and video banking software), which are particularly useful to financial institutions and retailers.

Products targeted especially at the retail and hospitality industries include POS terminals, self-check-in/out systems, self-service kiosks, bar-code scanners, software and services. Self-service kiosks for travel and gaming industries are also included in this portfolio.

The company also develops, produces and markets printer consumables, including paper rolls for receipts in ATMs and POS solutions, inkjet and laser printer supplies, thermal transfer and ink ribbons, labels, laser documents and business forms, as well as photo and presentation papers and thermal paper. These products serve the retail, transportation, financial services and manufacturing industries.

NCR also provides a broad range of services to support/maintain its product offerings. Its services include Predictive Services (which is a managed services offering designed to predict and address information technology issues before they happen), Software as a Service (SaaS) (which is a hosted service) and online, mobile and transactional services and applications such as bill pay and digital signage.

NCR derives the majority of its revenues from the United States, followed by Europe and AMEA (Asia, Middle East and Africa).

The company competes with players across all geographies. In the financial services industry, the company competes with Diebold, Inc. and Wincor Nixdorf GmbH & Co. (Wincor), among others. In the retail and hospitality industries, the company faces competition from IBM Corp. (IBM), Wincor, Fujitsu, Hewlett-Packard Company, Dell Inc., Honeywell and Datalogic, among others. Competition in the travel industry comes from IBM, SITA and IER. In the gaming industry, NCR's key competitors are IBM, Wincor and Cummins.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: NCR , IBM

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