) posted first-quarter 2013 earnings per share (EPS) of 54 cents,
which surpassed the Zacks Consensus Estimate of 40 cents.
NCR reported revenues of $1.41 billion in the first quarter of
2013, up 13.3% from $1.24 billion in the year-ago quarter. The
year-over-year improvement in revenues was mainly due to an
increase of 41.0% in Retail solutions and a 16.0% increase in
NCR is generating decent growth in software revenues across
its segments, especially in SaaS. Moreover, the company is
witnessing good business in line with its business
Revenues from the Financial Services segment were $714.0
million, up 3% from the year-ago quarter. The upside was driven
by growth in the Europe, as well as Asia, the Middle East and
Africa (AMEA) theaters, offset by lower revenues in the
segment, NCR completed the acquisition of Retalix, Ltd. The
company generated revenues of $489 million, up 41.0% from the
first quarter of 2012. The increase in revenues is driven by
growth in the Americas, Europe and AMEA theaters. Moreover,
excluding Retalix, revenue growth was 27.0% in the first quarter
segment witnessed a 16.0% increase in revenues and the growth can
be attributed to an improvement in the American theater
' revenues were $76.0 million, down 15.0% from the first quarter
of 2012, on both an actual and a constant currency basis. The
decrease in revenues was mainly driven by declines in the
Emerging Industries revenue in Americas and Europe theaters.
Gross margin in the quarter was 26.2% versus 20.3% in the
year-ago quarter. Gross margin looked good, up 120 basis points
year-on-year. Gross margin moved up excluding the effect of
Retalix in the quarter. Software was a key contributor to gross
NCR reported a profit of $62.0 million or 37 cents per share
in the reported quarter, compared with a loss of $10.0 million or
6 cents per share in the year-ago quarter. Excluding special
items like impairment, pension expense, acquisition related
transaction costs, amortization and legal settlement charges;
non-GAAP income from continuing operations was 54 cents per share
compared with 47 cents per share in the prior-year quarter.
Balance Sheet & Cash Flow
Net cash provided by operating activities was $21.0 million
during the first quarter of 2012, down from net cash generation
of $100.0 million in the previous quarter. The decrease can be
attributed to a change in working capital in anticipation of
higher revenues in the upcoming quarters.
NCR ended the first quarter of 2013 with $483 million in cash
and cash equivalents compared with $1.07 billion as of
Dec 31, 2012, due to the acquisition of Retalix. As of Mar
31, 2013, NCR had a total debt balance of $2.09 billion.
The company has raised its FY13 guidance. For the full-year
2013, NCR expects revenues to increase in the range of 9% to 11%
compared with 2012.
Moreover, NCR also expects its full-year 2013 income from
operations (GAAP) in the range of $546 million to $566 million,
while the non-pension operating income (NPOI) is expected to
remain in the range of $700 million to $720 million. GAAP
earnings per share are expected to be in the range of $2.08 to
$2.18 and non-GAAP diluted earnings per share to be in the range
of $2.70 to $2.80 per diluted share.
NCR manufactures ATMs, point-of-sale devices, cash dispensers
and various self-service kiosks. The company reported decent
first-quarter results, with revenues growing across all segments
and EPS surpassing the Zacks Consensus Estimate.
Given the ongoing improvement in NCR's Financial, Hospitality
and Retail verticals, the company expects to report decent
results for full-year 2013. NCR's growing exposure into ATM and
self-service kiosks spaces is encouraging, given tremendous
growth prospects in the respective markets.
Though stiff competition in the ATM space, European exposure
and high debt burden are concerns, we are optimistic on the stock
given the continuous products launches and synergies from
NCR has a Zacks Rank #2 (Buy).
One may consider other stocks that are going to report this
earnings season. These include companies such as
). All these stocks carry a Zacks Rank #2 (Buy).
AOL INC (AOL): Free Stock Analysis Report
MICRON TECH (MU): Free Stock Analysis Report
NCR CORP-NEW (NCR): Free Stock Analysis
PAYCHEX INC (PAYX): Free Stock Analysis
To read this article on Zacks.com click here.