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

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Summary:
NCR reported better-than-expected first-quarter results. The company witnessed margin expansion aided by higher mix of software business. However, the company provided tepid guidance, anticipating lower revenue growth from its Retail and Hospitality segments. Nevertheless, NCR's growing exposure into ATM and self-service kiosk spaces is encouraging, given tremendous growth prospects in the respective markets. Continuous product launches, growing popularity of its self-service offerings and synergies from acquisitions are the catalysts. Continuous deal wins also remain NCR's strong point. However, softness in the ATM business in mature markets and competition from Diebold Inc., European exposure and high debt burden are concerns. Thus, we reiterate our Neutral recommendation on NCR.

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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As of 7/25/2014, 12:12 PM