News

NCR sees profit jump, revenue fall

April 26, 2006

DAYTON, Ohio - NCR Corp. announced April 27 that its earnings for the first quarter of 2006 were better than expected, despite a revenue drop from the same period in 2005.

The company reported net income of $41 million, 22 cents per share, for the quarter, up 27.5 percent from $30 million, 16 cents per share, in 1Q '05. Revenue came in a $1.28 billion, down 4 percent from 1Q '05.

Operational-efficiency improvements more than offset lower revenue, the company said. NCR generated $38 million from operations in '06, an increase of $27 million from 1Q '05.

"Although I'm not pleased with our first-quarter revenue performance, I'm encouraged by our continued operational improvement in the quarter, which enabled NCR to deliver meaningful year-over-year earnings expansion," company president and chief executive Bill Nuti said in a news release. "Improvements in our Customer Services business more than offset the impact from the timing of certain transactions in our Teradata Data Warehousing business."

NCR's segments saw revenue fall across the board, with Teradata taking the greatest hit. Revenue for that segment was down 7 percent, from $350 million in 1Q '05 to $326 million. NCR said the quarter-to-quarter comparison in Teradata revenue was impacted by timing. The company expects to recuperate the revenue in the second quarter of the year.

Customer Service came in 6 percent lower, from $447 million in '05 to $419 million. But operating income for the segment improved, jumping to $20 million from $9 million last year. That improvement was driven by structural changes to optimize efficiency and revenue mix.

Financial Self-Service (ATM) came in 5 percent lower, $272 million to $259 million.

The Retail Store segment showed the shortest drop, falling only 2 percent from $175 million to $172 million.

Other news

Earlier this month, NCR announced that its head of Retail Store Automation resigned to lead Deluxe Corp., a check-printing company based in Shoreview, Minn. And April 26, the company announced the election of Gary Daichendt to its board of directors.

Daichendt has served as an executive vice president and senior vice president for Cisco Worldwide, as a vice president for Wang Laboratories, as president and chief operating officer for Nortel Networks, and has held sales and marketing positions with IBM.

In addition to NCR, Daichendt serves on the board of Packet Design and is a board advisor to IPcelerate and NAEN Ministries.