NCR Corporation (NYSE:NCR) Up Sharply on Earnings Beat


Shares in NCR Corporation (NYSE:NCR) surged 14.51% on Tuesday after the transactional service and omni-channel solutions provider declared Q3 numbers which beat estimates on both counts of earnings and revenue, as well as upped its guidance.

With 5.49 million shares traded, NCR scaled a high of $36.41 but closed the day at $34.64. The day’s high was a hair’s breadth short of the June 2015 high of $36.50.

NCR Corporation (NYSE:NCR): Accelerating revenue trends

During the third quarter NCR clocked sales of $1.68 billion, up 4.3%, and better than expectations by $50 million. EPS of $0.87 beat estimates by $0.06.

Chairman and CEO Bill Nuti said the highlights of the quarter included top line growth across all segments and strong cash flow generation. “Software revenue growth accelerated due to solid growth in cloud and software license,” he said, adding, “Hardware had a terrific quarter as we began delivering our new ATM and Branch products, while store transformation momentum continued to drive self-checkout volumes.”

In hardware the self-checkout segment grew 86% year on year, while in software, licensing was up 25%.

Gross margin was up 4%, while free cash flow grew to $153 million compared to $106 million a year ago.

NCR Corporation (NYSE:NCR): New guidance

The ATM-maker improved its full-year revenue and earnings guidance. The company estimates revenue in the range of $6.47 billion to $6.5 billion, up from the previous guidance of $6.325 billion to $6.4 billion.

EPS is now expected to be between $2.97 and $3.02 for the full year, up from previous guidance of $2.90 to $3.00.

NCR also reaffirmed its free cash flow guidance, expecting $425 million and $475 million for the full year.

“Accelerating revenue trends, ongoing improvement in execution, and the benefits of our global Omni-Channel leadership position” are factors driving the new guidance.

Analysts at Wedbush reiterated their rating on NCR at Neutral but boosted their price target from $25 to $30.


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