Magazine article American Banker

NCR to Top Guidance despite Revenue Dip

Magazine article American Banker

NCR to Top Guidance despite Revenue Dip

Article excerpt

NCR Corp. said Tuesday that it will beat its fourth-quarter earnings guidance by a dime but report a slight drop in revenue.

The automated teller machine company, which will officially release results for the quarter next week, said that better-than-expected revenue growth and profits in its Teradata Data Warehousing unit and improvement in its customer services business, which provides ATM maintenance, helped its earnings reach 67 cents a share. It had projected 52 cents to 57 cents.

NCR said it expects to report revenue of $1.71 billion, down about 4% from the fourth quarter of 2004. The drop includes a 3-percentage-point hit from foreign currency fluctuation.

Revenue for the ATM and self-service checkout systems will be roughly in line with expectations, the company said. It said it expects 2006 earnings of $1.85 to $1.90 per share and that the second half would be stronger than the first.

Kartik Mehta, an analyst for First Horizon National Corp.'s FTN Midwest Securities, said: "I think the bulk of the good news has to do with the customer services business. That's where they've really made a real improvement."

Mr. Mehta said the unit lost money in 2004 but that NCR has managed to cut its costs and generate a profit from it.

Megan Graham-Hackett, an analyst for Standard & Poor's Equity Research, called the unit a "big swing factor" for the Dayton, Ohio, company.

NCR "continues to be a story of improving profitability, really turning around customer services, and focusing a lot of its resources" on Teradata, Ms. Graham-Hackett said. Teradata offers hardware and software that banks use for customer relations management. …

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