News

NCR earnings up in '04's 2Q, but stock falls on lowered forecast

July 29, 2004

DAYTON, Ohio - Buoyed by improved sales in its Teradata and Financial Self-Service divisions, NCR reported second-quarter net income of $122 million, or $1.27 per diluted share, versus a net loss of $13 million, or 14 cent loss per diluted share, in 2003's second quarter.

Revenues were $1.45 billion for the quarter, up from $1.36 billion in 2003's second quarter. Operating income for the latest quarter was $53 million, compared to $16 million a year ago.

The strongest performer was the Teradata division, with record second-quarter revenue of $331 million, up 10 percent from 2003's second quarter. Operating income was $60 million, up from $32 million in the second quarter of 2003.

The Financial Self Service division, which includes ATM sales and service, generated record revenue of $330 million, up 27 percent from the year-ago period.

According to NCR, "We are seeing continued growth in upgrades, replacements and the purchase of new automated teller machines as banks focus more on branch banking, transaction migration and compliance with regulatory changes."

Despite the improvements, Wall Street punished NCR after the company released a forecast for the remainder of 2003 that did not meet analysts' expectations. According to several published reports, the company's stock fell 7 percent on July 29, closing at $45.46 on the New York Stock Exchange, after NCR predicted third-quarter earnings of between 15 and 20 cents a share and 2004 earnings of between $1.20 to $1.25.

NCR said $20 million in severance costs would likely reduce its yearly earnings by 15 cents a share.

Analysts surveyed by Thomson First Call had expected third-quarter earnings of 31 cents a share and 2004 earnings of $1.45.