) posted second-quarter 2013 earnings per share of $0.65, in line
with the Zacks Consensus Estimate.
NCR reported revenues of $1.54 billion in the second quarter
of 2013, up 8.9% from $1.41 billion in the year-ago quarter. The
year-over-year improvement in revenues was mainly due to a 5.2%
increase in Product revenues and a 12.7% increase in Service
NCR is generating decent growth in software and service
revenues across its segments. Moreover, the company's business
volume is increasing regularly.
Revenues from the
segment were $782.0 million, down 1.0% from the year-ago quarter.
The downside was driven by the decline in the Americas theater
offset to a considerable extent by the growth in the Asia Middle
East Africa (AMEA) theater.
segment, the company generated revenues of $515.0 million, up
26.0% from the second quarter of 2012. The increase in revenues
is driven by a decent improvement in the Americas, Europe and
AMEA theaters. Moreover, excluding Retalix, revenue growth was
6.0% in the reported quarter.
segment witnessed a 22.0% increase in revenues and the growth can
be attributed to an improvement in the American theater
' revenues were $80.0 million, down 5.0% from the second quarter
of 2012. The decrease in revenues was mainly driven by declines
in the Emerging Industries revenues in the Americas and Europe
Gross margin in the quarter was 27.8% versus 26.5% in the
year-ago quarter. Gross margin improved 121 basis points year on
year, mainly due to the improvement in the high-margin software
business. The company also had a good core gross margin expansion
related to its core business activity.
NCR reported net income from continuing operations of $86.0
million or $0.51 per share in the quarter, compared with a profit
of $89.0 million or $0.54 per share in the year-ago quarter.
Excluding special items like impairment, acquisition related
transaction costs, amortization and legal settlement charges,
non-GAAP income from continuing operations was $0.65 per share
compared with $0.61 per share in the prior-year quarter.
Balance Sheet & Cash Flow
Net cash used in operating activities was $32.0 million
compared to net cash provided by operating activities totaling
$21.0 million in the previous quarter. Without considering the
impact of $80 million pension settlement payment that the company
made to the U.S. non-qualified pension plans during the quarter,
free cash flow for the quarter came in at a negative ($21)
For the full-year 2013, NCR expects revenues to increase in
the range of 9% to 11% compared with 2012 revenue. Moreover, NCR
expects its full-year 2013 income from operations (GAAP) in the
range of $546 million to $566 million, while non-pension
operating income (NPOI)is expected to remain in the range of $700
million to $720 million. GAAP earnings per share are expected in
the range of $2.08 to $2.18 and non-GAAP earnings per share in
the range of $2.70 to $2.80.
NCR reported decent second-quarter results, with revenues
growing across all segments and earnings per share surpassing the
Zacks Consensus Estimate. The company also maintained its fiscal
2013 guidance anticipating more balanced revenue growth across
its core Financial, Hospitality and Retail verticals. The company
also benefited from a gross margin expansion, as the company
witnessed a decent amount of high-margin software business.
The company also witnessed a meaningful increase in its
bottom-line. 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 catalysts. However, softness in ATM business in
the mature markets and stiff competition from
), European exposure and high debt burden are concerns.
The company has a Neutral recommendation.
Investors could also consider other technology stocks, such as
) having a Zacks Rank#1 (Strong Buy) and
), having a Zacks Rank #2 (Buy).
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