Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

NCR Q4 Earnings Miss, Revenues Beat Estimates, Down Y/Y

By Zacks Investment ResearchStock MarketsFeb 10, 2021 03:15AM ET
www.investing.com/analysis/ncr-q4-earnings-miss-revenues-beat-estimates-down-yy-200559929
NCR Q4 Earnings Miss, Revenues Beat Estimates, Down Y/Y
By Zacks Investment Research   |  Feb 10, 2021 03:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

NCR (NYSE:NCR) Corporation NCR fourth-quarter 2020 non-GAAP earnings of 59 cents per share missed the Zacks Consensus Estimate of 66 cents. Moreover, the reported figure plunged 30.6% on lower revenues, year over year.

The company’s revenues of $1.63 billion surpassed the consensus mark of $1.62 billion. The top-line figure, however, decreased 14% year over year on a reported basis. Management noted that the foreign-currency fluctuations did not impact the fourth-quarter results.

The coronavirus pandemic has hurt the company’s hardware business. NCR’s hardware revenues plunged 30% on a 36% decline in ATM hardware and 23% fall in SCO/POS (Self-Checkout/Point-of-Sale) sales.

During the earnings conference call, the company noted that approximately $203 million or 80% of the decline in total revenues resulted from a weak hardware business performance. In addition, a shift from selling perpetual software licenses to recurring revenues hurt quarterly revenues by $32 million.

Quarter Details

Banking revenues slid 16% on a reported as well as on constant currency (cc) basis year over year, due to the pandemic-induced 36% decline in ATM hardware revenues. Shift from selling perpetual software licenses to recurring revenues also affected the year-over-year comparison. Unfavorable currency exchange rates did not impact the Banking segment’s top-line performance during the fourth quarter.

Retail revenues decreased 7% on a reported basis and 8% on cc basis, mainly due to decrease in SCO and POS revenues, partially offset by higher service revenues. However, favorable foreign currency-exchange rates aided the Retail division’s revenues by 1%.

Hospitality revenues slipped 22% on a reported and 21% on a cc basis, primarily on a decline in hardware revenues. Unfavorable currency-exchange rates hurt the segment’s top-line performance by 1%.

The company’s Digital Banking Solution witnessed solid momentum and added five new customers. Digital banking’s registered users grew 12% year over year.

Margins

Non-GAAP gross profit of $465 million was down 14% year over year. Non-GAAP gross margin contracted 20 basis points to 28.5%. Lower revenues due to the pandemic and shift to recurring revenues are the key reasons behind these declines in gross profit and margin.

Non-GAAP operating expenses declined 3.4% year on year to $313 million, chiefly on the company’s cost-cutting initiatives to address the pandemic’s impact on the business. Its cost-cutting measures, included salary reductions, curtailing travels, and elimination of certain contractors.

Non-GAAP operating income declined to $152 million from the year-ago quarter’s $217 million. Non-GAAP operating margin shrunk 220 basis points to 9.3% from the year-earlier quarter’s 11.5%.

Other Financial Details

NCR ended the December-end quarter with cash and cash equivalents of $338 million compared with the $1.61 billion reported during the September-end quarter.

Free cash inflow was $149 million compared with the prior quarter’s $302 million. Net cash provided by operating activities was $146 million during the fourth quarter. In fiscal 2021, the company generated operating and free cash flows of $641 million and $448 million, respectively.

Notably, NCR suspended its share-repurchase program and merger and acquisition activities, and cut senior employee salaries among other cost-cutting steps during first-quarter 2020, in order to strengthen the company’s liquidity position.

Additionally, on Mar 24, 2020, the company withdrew the remaining available funds of $630 million from its five-year, $1.1-billion revolving credit facility. Also, on Apr 13, 2020, the company issued $400 million of senior unsecured notes.

Furthermore, the company deleveraged its balance sheet by $200 million in August 2020 through redeeming $1.3 billion of debt and issuing $1.1 billion of debt.

Zacks Rank and Key Picks

NCR currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Shopify (NYSE:SHOP) SHOP, Zoom Video Communications (NASDAQ:ZM) ZM and Apple AAPL, all flaunting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Shopify, Zoom and Apple is currently pegged at 32.5%, 25% and 11.5%, respectively.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Apple Inc. (NASDAQ:AAPL): Free Stock Analysis Report

NCR Corporation (NCR): Get Free Report

Shopify Inc. (SHOP): Free Stock Analysis Report

Zoom Video Communications, Inc. (ZM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research
NCR Q4 Earnings Miss, Revenues Beat Estimates, Down Y/Y
 

Is Apple Undervalued?

Based on 15 different premium valuation models, we calculate whether Apple stock is undervalued or overvalued every day. If you are considering Apple for your portfolio, you need to check this out:

See Fair Value Now
Unlock Apple's unbiased fair value with InvestingPro+

Related Articles

Michael Kramer
Stocks May Finally Get To Pivot   By Michael Kramer - Aug 17, 2022 5

Stocks finished slightly higher yesterday after giving up some decent size gains. The S&P 500 traded as high as 4,325 to come within 1 point of the 200-day moving average; it...

NCR Q4 Earnings Miss, Revenues Beat Estimates, Down Y/Y

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email