Article

NCR beats Wall Street Q3 estimates, raises FY revenues

ATM revenues were up 55% in the third quarter for NCR, most of that in hardware sales. Gains in all three business segments led the company to raise its top line view.

NCR's SelfServ ATMs. Photo provided by NCR

November 8, 2019 by Amy Castor — Editor, Networld Media Group

NCR Corporation, a software and services provider for the financial industry, reported better-than-expected results during the third quarter as it gained revenue in all its major business segments. 

In the third quarter, the company saw per-share earnings of 73 cents, up from 58 cents a year ago and beating analyst's predictions of 68 cents. Revenue of $1.78 billion was up 15% year over year. Analysts had predicted $1.62 billion for the quarter.

Growth was once again led by the firm's banking segment with 18% growth and ATM revenues up 55%, but it also included diversified sales growth as each of the company's business segments generated gains.

As a result, the company raised its top line view. It now expects its revenue growth to be approximately 5-6% year over year, as opposed to 3-4% previously predicted.

Banking revenue boosted by ATM sales

NCR has three major business segments: banking, retail and hospitality. Third quarter gains in banking were helped by ATM sales. 

"Driving ATM revenue this quarter was both double-digit growth in ATM orders as well as a significantly higher backlog conversion rate as our manufacturing initiatives have resolved many of the supply and capacity constraints we experienced last year," Andre Fernandez, NCR's CFO, said in an earnings call.  

Software related to ATMs combined with growth in services revenue also contributed to the increase in segment revenue. NCR continues to grow its hardware maintenance backlog as a future annuity stream both from ATM revenue as well as from a large customer win this year to service non-NCR fleets, the company said.

"We continue to see a stronger than expected ATM replacement cycle in addition to Win 10 upgrade with strength in the quarter in the Americas and in Europe," Fernandez said. 

The company hopes to carry the momentum across all of its business segments into the fourth quarter. 

"We will continue to allocate capital to the highest growth and return opportunities with the goal of driving free cash flow generation and increasing returns for our shareholders," Michael Hayford, the company's president and CEO, said in the earnings call.

About Amy Castor

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Amy Castor has more than 20 years of experience in journalism and mass communications. In the last several years, she has gotten particularly interested cryptocurrencies, blockchain technologies and other evolving forms of payment. Her work has appeared in consumer and trade publications throughout the U.S., including CoinDesk, Forbes, and Bitcoin Magazine. She is now the editor of ATMmarketplace.com and WorldofMoney.com

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