News

NCR reports 1Q '03 earnings

April 23, 2003

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DAYTON, Ohio -- NCR Corporation (NYSE:NCR) reported a net loss of $27 million, or 28 cents a share, on revenues of $1.23 billion for 2003's first quarter, an improvement over a net loss of $344 million, or $3.41 per share, in 2002's first quarter.

The 2002 period included a $344 million charge for an accounting change. Before that change, NCR posted net income of $4 million, or 4 cents per share.

The manufacturer posted a first-quarter 2003 operating loss of $32 million compared to $9 million of operating income reported in 2002's first quarter. The loss was largely due to pension expense of $24 million in the first quarter of 2003, compared to $20 million of pension income in the 2002's first quarter.

Sales fell to $1.23 billion from $1.25 billion. The decline included a benefit of 6 percentage points from foreign currency fluctuations.

Revenue from products fell to $591 million from $612 million, while revenue from services increased to $643 million from $635 million.

Mark Hurd, NCR's new chief executive, said the company is in the early stages of a large-scale cost reduction that will lead to financial improvement over the next several quarters.

According to a news release, NCR's Financial Self Service business, which includes ATMs, generated first-quarter revenue of $226 million, up 10 percent from 2002's first quarter, led by strong growth in the Americas region. The increase includes a year-over-year benefit of 8 percentage points from foreign currency fluctuations. First-quarter operating income was $9 million compared to break-even operating performance in 2002's first quarter.

NCR expects second quarter 2003 revenues in the Financial Self Service segment to be in line with 2002's second quarter.

NCR's Retail Store Automation business recorded revenue of $149 million in 2003's first quarter, up 18 percent from the 2002's first quarter, including a year-over-year benefit of 6 percentage points from foreign currency fluctuations. Retail Store Automation improved its operating performance by $7 million from the $30 million operating loss recorded in the first quarter of 2002.

NCR expects Retail Store Automation revenue to be up 8 percent to 10 percent in 2003's second quarter versus the second quarter of 2002 due to a strong order backlog.

NCR's Data Warehousing business reported first-quarter revenue of $278 million, outpacing guidance, but down 4 percent from 2002's first quarter, including a year-over-year benefit of 6 percentage points from foreign currency fluctuations. Operating income of $31 million for the quarter increased almost 50 percent from the first quarter of 2002, reflecting a favorable revenue mix of software and support services, as well as continued cost and expense improvements.

NCR expects its second-quarter revenues, including support services, to be down about 5 percent compared to 2002's second quarter.