NCR Corp. on Thursday reported a higher net income on improved revenues for the three-month period ended Sept. 30, 2010, due to strong sales in Europe, Middle East and Africa.
The Duluth, Ga.-based company recorded a third-quarter net income of $83 million compared with a net income of $15 million for the same three-month period last year. Although the business recorded a $50 million pension expense, it received a $39 million income tax benefit from its Japanese subsidiary. NCR also received a $6 million income tax benefit related to the relocation of the company's headquarters from Dayton, Ohio, to Duluth.
NCR reported third-quarter revenues of $1.207 billion, up 6 percent, compared with $1.135 billion for the same three-month period last year.
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"The entire NCR team executed at a high level during the third quarter, and we are on track to deliver growth for the full year," said Bill Nuti, chairman and CEO. "We generated solid growth in orders, revenue and non-pension operating income in the third quarter, and we have entered the fourth quarter with momentum for our businesses. Our core financial and retail businesses have further stabilized, and our multichannel self-service technologies continue to gain mindshare and market penetration."
The manufacturer maintained its revenue guidance of 2 percent to 5 percent growth on a constant currency basis compared with 2009.
NCR reported third-quarter product sales of $600 million, up 11 percent compared with $551 million in 2009's third quarter. The company also recorded revenues from services of $607 million, up 2 percent compared with $594 million in 2009's third quarter.
The company reported revenue by geographic region.
In the Americas, NCR recorded third-quarter revenue of $535 million, up 4 percent, compared with $514 million for the same three-month period last year. NCR attributed the growth to the retail, hospitality and entertainment industries. The increases were partially offset by decreases in the financial-services industry.
NCR reported that revenue from Europe/Middle East/Africa (EMEA) was $429 million, up 10 percent compared with $390 million for the same three-month period last year. Revenue grew in EMEA due to higher volume of product sales and services in the financial, retail and hospitality industries. Growth in EMEA, however, was negatively affected by foreign currency translation.
In Asia-Pacific-Japan, revenue increased 5 percent to $243 million compared with $231 million in last year's third quarter. NCR attributed the improvement to higher product revenue in North Asia Pacific and higher service revenue in South Asia Pacific, both within the financial-services industry.
Gil Luria, senior vice president of equity research for financial technology with Wedbush Securities in Los Angeles, says he was encouraged by NCR's steady progress.
"We expect NCR shares to recover once its ATM and retail markets achieve a sustainable recovery and the company gets beyond its current pension challenges," Luria said.
He added that NCR's revenue was slightly better on continued momentum in EMEA. In the United States, NCR management reported increased visibility of deposit automation among second-tier banks. "Deposit automation will be the driver of U.S. growth in 2011 and 2012," Luria said.
NCR is the world's largest ATM manufacturer based on annual shipments.
