NCR Corp. (NCR) is scheduled to release its first quarter 2012 results on April 19, 2012 and we see some variation in the analysts’ estimates at this point.
Fourth Quarter Recap
The company reported fourth quarter 2011 earnings per share (EPS) of 65 cents, surpassing the Zacks Consensus Estimate of 57 cents.
Revenue generated during the fourth quarter was $1.64 billion, up 16.7% from $1.40 billion in the year-ago quarter. Global orders grew 24.0% annually and helped the company maintain a strong backlog entering into 2012.
NCR reported fourth quarter net loss from continuing operations of $13.0 million or 8 cents per diluted share compared to profit of $33.0 million or 20 cents per diluted share in the year-ago quarter. Excluding special items like impairment, pension expense, acquisition related transaction cost, amortization and legal settlement charges non-GAAP income from continuing operations was 65 cents per diluted share compared with 56 cents per diluted share in the year-ago quarter.
The company expects full-year 2012 revenues to increase in the range of 11.0% to 13.0%. GAAP diluted earnings per share are expected in the range of $1.48 to $1.55 and non-GAAP diluted earnings per share, excluding pension expense and special items, in the range of $2.40 to $2.47 per diluted share.
Agreement of Analysts
There were no estimate revisions for the March quarter over the last 30 days. Out of the seven and six analysts providing estimates for fiscal year 2012 and 2013, respectively, 3 analysts have revised their upward for the fiscal year 2012, while three analysts have made an upward revision in estimate for the fiscal year 2013 over the last 30 days.
Analysts are of the opinion that NCR will benefit from the US bank ATM upgrade cycle, which is expected to result in new wins at Radiant and new product introductions. Moreover, after conducting thorough industry checks, analysts have formed an opinion that U.S. banks, of different sizes, will continue with their existing spending pattern on ATMs, fueled by a deposit automation upgrade cycle.
Some analysts are also of the opinion that the ATM Industry Preview, and large ATM manufacturers like NCR Corporation and Diebold, Incorporated are likely to benefit from strong momentum among different banks, as banks are focusing on better security needs and ADA compliance.
Furrther, the ATM major is also generating significant growth in Latin America. Analysts also expect that unit volumes in Asia are trending positively as emerging market demand is slowly reviving.
On the other hand, NCR’s sales are affected by seasonality, with the first quarter bringing lower revenue and the fourth quarter generating higher revenue each year. Such seasonal nature of the business leads to fluctuation in cash flows and makes it difficult for the company to determine working capital requirements. These factors hinder the company’s outlook and negatively affect its ability to project financial results accurately.