Earnings Preview: NCR

NCR (NCR) is expected to report Q2 earnings before market open Tuesday, July29, with a conference call scheduled for 8:00 a.m. ET.

Guidance

The consensus estimate is 35c for EPS and $1.26B for revenue, according to First Call. The guidance that the company provided was for FY08 EPS of $1.52 to $1.57, on their last earnings call.

Analyst Views

Wedbush said that NCR remains a solid defensive investment that it believes retains control over its ability to exceed expectations through cost cutting and share buy backs. The firm also believes surprisingly strong top line growth provides further upside to its expectations. Wedbush estimates 34c on $1.29B in revenues for Q2, and believes the company's 2008 EPS guidance remains conservative. The firm believes continued success in cost-cutting, a positive mix-shift towards sales of higher margin products such as ATMs and self-service retail POS systems, and continued share buybacks may be enough to exceed the high end of guidance.

Wedbush said the USPS deal could help prop up growth in 2H08. The firm believes NCR is on track to exceed 2008 top-line guidance of 5% to 7%, particularly as orders from the USPS fill the gap that was to be created by the winding down of two large attended POS roll-outs that drove top-line upside in 2H07 and Q108. Wedbush has a Strong Buy rating with $31 target on the shares.