) posted second quarter 2012 earnings per share of 65 cents, well
above the Zacks Consensus Estimate of 59 cents.
NCR Corp. reported revenues of $1.41 billion in the second
quarter, up 11.0% from $1.27 billion in the year-ago quarter.
Financial services generated revenues of $783.0 million, up 7.4%
from the second quarter of 2011. Total orders improved 19.0% on a
Retail solutions revenue declined 9.3% year over year to $409.0
million in the quarter. The decrease resulted from declines in the
Americas and Europe theaters and the impact from the shift in
specialty retail and hospitality accounts between the Retail
Solutions segment and the Hospitality segment.
The Hospitality segment generated revenue of $130.0 million in
the reported quarter, benefiting from higher product volumes and
services revenue in the Americas region.
Emerging Industries segment generated revenue of $87.0 million,
down 5.0% year over year. The decline in the segment revenue can be
attributed to lower business activity in the Americas.
Gross margin in the quarter was 25.3% versus 21.9% in the
year-ago quarter. The year-over-year upside in gross margin was
fueled by higher product and services sales, favorable customer and
product mix, especially software, and the successful implementation
of cost-reduction initiatives driven by the company's continuous
NCR reported net income of $67.0 million or 41 cents per diluted
share in the reported quarter, compared with $45.0 million or 28
cents per diluted share in the year-ago quarter. Excluding special
items like impairment, pension expense, acquisition related
transaction cost, amortization and legal settlement charges,
non-GAAP income from continuing operations was 65 cents per diluted
share compared with 52 cents per diluted share in the prior-year
Balance Sheet & Cash Flow
Net cash provided by operating activities was $31.0 million
during the second quarter of 2012, down from $71.0 million in the
year-ago period. Cash from operating activities was negatively
impacted by additional pension contributions.
NCR ended the quarter with $377 million in cash and cash
equivalents versus a balance of $414 million as of March 31,
2012. Net capital expenditures of $37 million increased slightly
from $36 million in the second quarter of 2011.
The company's full-year 2012 revenue is expected to increase in
the range of 11.0% to 13.0% on a year-over-year basis. Income from
Operations (GAAP) is expected to be in the range $362.0 million to
$377.0 million for fiscal 2012. GAAP diluted earnings per share are
expected in the range of $1.45 to $1.52 and non-GAAP diluted
earnings per share in the $2.40 to $2.47 per diluted share range.
The company expects other expenses of around $40 million, net
including interest expense in 2012.
NCR reported decent second quarter results, with revenues
improving across most of its business segments and geographical
regions while EPS exceeding our expectation. This apart, the
company witnessed an improvement in gross margin, as a result
higher product and services sales, favorable customer and product
mix, including significant cost saving.
The company has also provided decent fiscal year guidance and
the company believes that the company is well positioned to deliver
solid momentum across all its businesses.
The company has improved its operating performance and is
managing its expenses well. We believe that the company should
reduce its debt balance to further improve its operating
performance, and must come up with new strategies to compete
The company has a Zacks #3 Rank, implying a short-term Hold
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