DAYTON, Ohio - During an earnings call Jan. 25, NCR Corp. president and chief executive Bill Nuti said the fourth quarter of 2006 was the highest-ever revenue-generating quarter for the company's Teradata warehousing division. It also was one of the best quarters for the company overall, he said.
"NCR produced one of its best quarters in recent history, demonstrating the success of the initiatives we have undertaken during the last year to leverage our leadership positions in the self-service and data-warehousing markets, improve operational performance and reduce costs," Nuti said. "While we have more work to do to build sustainable growth and profits in our key businesses, we are excited about the future. The planned strategic separation of Teradata and NCR is expected to create two strong independent companies with an even stronger focus on their distinct customer bases, business strategies and operational needs."
Though NCR said it was too early to share financial forecasts related to the spin-off of the Teradata division, it did say it expects to see a 2 percent increase in the operating margin of its ATM/financial self-service division by close of 2007. That segment has been operating at a 12 percent margin for the last several years, which is unacceptable, the company said. By end-2007, the margin should hit 14 percent.
NCR's decision to outsource its Americas ATM manufacturing to Selectron, and depend more heavily on its ATM manufacturing facilities in India, Budapest and China, should have a positive impact on 2007 earnings. And the expectation that Check 21 technology will be adopted more rapidly in North America during the second half of 2007, as well as NCR's plans to release a bulk-check-deposit product later in the year, also is expected to benefit the division.
Overall, the company reported fourth-quarter revenue of $1.8 billion, up 5 percent from 4Q '05. Net income hit $174 million, 96 cents per share, up 16 percent from last year.
Teradata reported 4Q revenue of $469 million, up 15 percent from 4Q '05. Operating income for the quarter hit $112 million, a 26 percent increase from $89 million last year.
The ATM division also reflected growth for the quarter, with $472 million in revenue, a 6 percent increase, and operating income of $85 million, up 1 percent from last year.
The ATM division's higher revenue offset price erosion, which actually outpaced efforts to reduce costs, the company said.
Retail Store Automation reported revenue of $258 million, the same reported in 4Q. But the segment reported an improved mix of self-service technologies, including self-checkout systems and technologies that allow consumers to their own pay bills and check-in at airports, hotels and hospitals.
Operating income for the segment came in at $22 million, up 16 percent from last year.
Customer Services revenue improved 2 percent during the quarter from 4Q '05, in part because of an 11 percent increase in ATM maintenance services, Nuti said. Revenue hit $482 million, up 2 percent from the $471 million recorded in 4Q '05. Operating income, however, dropped 9 percent, from $25 million to $23 million. Increased costs associated with parts affected that income, NCR said.
