News

NCR announces strong Q3 results

October 27, 2011

NCR Corp. reported financial results today for the three months ended Sept. 30, 2011. Reported revenue of $1.40 billion increased 16 percent from the third quarter of 2010. Third-quarter revenues reflect a favorable impact of 5 percent as a result of foreign currency translation.

"Our third quarter featured strong execution and performance in addition to two strategic transactions that will help shape NCR's future," said Bill Nuti, chairman and CEO of NCR. "We are winning business across our core and emerging verticals and exited the quarter with backlog at historic levels. We also continue to expand our services business through increased attach rates both in traditional and emerging markets, the latter evidenced by an important new ATM services contract with one of China's largest banks."

Highlights include:

• Operational results ahead of expectations; quarter-ending backlog of $1.2 billion the highest in company history.
• Revenue growth of 16 percent and global orders up 36 percent compared to prior year period.
• GAAP diluted EPS from continuing operations of $0.10 compared to $0.48 in the prior year period; non-GAAP diluted EPS from continuing operations of $0.53, an increase of 15 percent from the prior year period.
• Acquisition of Radiant Systems successfully closed; integration process on plan; potential revenue and cost synergies remain consistent with previous company expectations.
• NCR raises full year 2011 revenue, non-GAAP income from operations and free cash flow guidance.

"During the quarter we completed the acquisition of Radiant Systems Inc., creating a third core solutions vertical in hospitality and specialty retail that offers immediate growth opportunity and accelerates our strategic objective of migrating to a software-enabled and services-led business model. Integration is well underway, and early results are fully consistent with our expectations," Nuti said.

The company's second strategic transaction was the alliance with Scopus Tecnologia, a subsidiary of the major Brazilian financial group Banco Bradesco.

"The alliance, and the accompanying ATM supply agreement with Bradesco, significantly and quickly expand our presence in the key Brazilian ATM market, with an initial order for 6,000 ATMs. Together, these transactions, along with a demand environment that remains healthy around the world, position NCR for solid 2011 performance while increasing confidence in our longer-term growth outlook."

NCR reported third-quarter income from continuing operations (attributable to NCR) of $16 million, or $0.10 per diluted share, compared to income from continuing operations (attributable to NCR) of $78 million, or $0.48 per diluted share, in the third quarter of 2010.

Income from continuing operations in the third quarter of 2011 included $62 million ($44 million or $0.27 per diluted share, after-tax) of pension expense, $24 million ($19 million or $0.12 per diluted share, after tax) of acquisition related transaction costs, $6 million ($4 million or $0.03 per diluted share, after tax) of acquisition related severance costs, and $3 million ($2 million or $0.01 per diluted share, after tax) of acquisition related amortization of intangible assets. Income from continuing operations for the third quarter of 2010 included $50 million ($33 million or $0.20 per diluted share, after-tax) of pension expense, $6 million ($3 million or $0.02 per diluted share, after-tax) of incremental costs related to the relocation of the Company's global headquarters and $39 million ($0.24 per diluted share) of income tax benefit due to the release of a valuation reserve related to our Japanese subsidiary.

Excluding these items, non-GAAP income from continuing operations in the third quarter of 2011 was $0.53 per diluted share compared to $0.46 in the prior year period.

2011 Outlook

NCR expects full-year 2011 revenues to increase in the range of 8 to 10 percent on a constant currency basis compared with 2010. Including acquisition-related costs, NCR now expects its full-year 2011 Income from Operations (GAAP) to be $151 million to $161 million, non-GAAP non-pension operating income (NPOI) to be in the range of $410 to $420 million, GAAP diluted earnings per share to be $0.65 to $0.69 and non-GAAP diluted earnings per share excluding pension expense and special items to be in the range of $1.79 to $1.83 per diluted share. The 2011 non-GAAP diluted EPS guidance excludes estimated pension expense of $225 million (approximately $158 million after-tax) compared with actual pension expense of $208 million ($149 million after-tax) in 2010. NCR expects its full-year 2011 effective income tax rate to be approximately 27 percent.

The company expects fourth quarter 2011 non-pension operating income (NPOI) to be in the range of $139 million to $149 million, compared to $112 million in the fourth quarter of 2010. Other expense, net, including interest expense, is expected to be approximately $10 million in the fourth quarter.

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