Is NCR Still A Sheep In Wolf's Clothing?
Stephen Simpson, CFA
Stephen Simpson, CFA
NCR Corp. Still Undervalued, But Not Helping Its Cause
Stephen Simpson, CFA
Stephen Simpson, CFA
Yesterday, 5:35 PM
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Tue, Jun. 7, 4:40 PM
- In addition to missing FQ2 EPS estimates (while beating on revenue), VeriFone (NYSE:PAY) is guiding for FQ3 revenue of $515M and EPS of $0.40, well below a consensus of $552.1M and $0.59.
- In addition, the point-of-sale hardware/software firm now expects FY16 (ends in October) revenue of $2.1B and EPS of $1.85, below a consensus of $2.16B and $2.23.
- CEO Paul Galant: "Q2 was a mixed quarter for Verifone as we grew our business, but experienced several difficult market dynamics. As a result, it is necessary for us to adjust for these risks and update our outlook for FY16 to $2.100 billion dollars of revenue and $1.85 of earnings per share. We are aggressively executing mitigating actions including a headcount restructuring and a review of underperforming businesses."
- Non-GAAP gross margin fell 40 bps Y/Y in FQ2 to 42.4%. Operating expenses rose 9.4% Y/Y to $190.6M (compares with 7.4% revenue growth). VeriFone ended FQ2 with $157M in cash and $955M in debt.
- VeriFone is down 27.7% after hours to $20.40. Rival NCR is down 1.6% to $31.20.
- VeriFone's FQ2 results, earnings release
Tue, Apr. 26, 5:56 PM
- NCR logged a beat on Q1 profits (and a narrow miss on revenues) in a quarter marked by a beginning to its business transformation initiative.
- Software and Services mix improved, as software revenue gained 1% to $419M and service revenues grew 4% to $543, offset by hardware revenue that fell 11% to $482M.
- Gross margin (non-GAAP) was $396M, down from $407M.
- Revenue breakout: Products, $548M (down 9.3%); Service, $896M (up 2.8%).
- Guidance was mixed, with a forecast for Q2 revenue of $1.56B-$1.58B (ahead of expected $1.55B) and non-GAAP EPS of $0.60-$0.65 (light of expected $0.71, but including impact from divestiture of the Interactive Printer Solutions business as well pension expenses and forex headwinds).
- For full 2016, it's forecasting revenues of $6.25B-$6.35B (vs. expected $6.2B) and non-GAAP EPS of $2.90-$3.00 -- up from a previous $2.85-$2.95, and ahead of expected $2.89.
- Shares are flat in after-hours trading.
- Conference call link
- Press Release
Tue, Apr. 26, 4:20 PM
Mon, Apr. 25, 5:35 PM
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Fri, Mar. 11, 5:08 PM
- VeriFone (PAY +6.2%) rallied to its highest levels since December after beating FQ1 estimates and issuing strong FY16 (ends Oct. '16) guidance: Revenue of $2.15B-$2.17B and EPS of $2.21-$2.24 vs. a consensus of $2.1B and $2.16. Point-of-sale hardware/software peer NCR (NCR +4.5%) also outperformed on a day the S&P rose 1.6%.
- VeriFone's FQ2 guidance is for revenue of $530M and EPS of $0.51-$0.52 vs. a consensus of $515.3M and $0.51. FY16 free cash flow guidance remains at $175M.
- A 7.7% Y/Y increase in systems revenue (to $337.6M) fueled VeriFone's FQ1 sales beat. Services revenue rose 1.8% to $175.9M. EPS received a lift from cost controls - GAAP operating expenses rose only 1.8% Y/Y to $179.1M - and $80M worth of stock repurchases.
- On the earnings call (transcript), CEO Paul Galant talked up VeriFone's Chinese opportunity. "In China, we achieved our China national entity certification as well as seven individual product certifications in January. This allows us to now compete for the device business of the country's top five banks for the first time in over a year. These five banks account for roughly half of China's $700 million-plus device market ... we expect the start of revenue growth in China in the second half of 2016, and this will accelerate significantly through 2017 and beyond."
- VeriFone's FQ1 results, earnings release
Tue, Feb. 9, 6:58 PM
- NCR has used its Q4 report to guide for 2016 revenue of $6.1B-$6.2B and EPS of $2.72-$2.82, below a consensus of $6.59B and $2.92. Free cash flow is expected to rise to $425M-$475M from 2015's $409M and 2014's $313M. The guidance is said to reflect forex headwinds, pension expenses, and the pending sale of NCR's commercial printing supplies unit (expected to close in Q2).
- Q1 guidance is for revenue of $1.44B-$1.45B and EPS of $0.30-$0.35, below a consensus of $1.49B and $0.52.
- Top-line performance: Hardware revenue fell 12% Y/Y in Q4 to $631M, software license/maintenance 7% to $176M, and professional services 6% to $149M. Cloud/SaaS revenue rose 4% to $134M, and other services 2% to $590M. Financial Services revenue -11% Y/Y, Hospitality +10%, Retail Solutions and Emerging Industries flat.
- Financials: Lifting Q4 EPS: Gross margin rose 390 bps Y/Y to 28.8%, GAAP SG&A spend fell by $34M to 254M, and R&D spend fell by $22M to $55M. Following its $820M Blackstone investment and $1B accelerated buyback, NCR ended 2015 with $328M in cash and over $3.2B in debt.
- NCR is unchanged after hours for now.
- NCR's Q4 results, earnings release
Tue, Feb. 9, 4:16 PM
Mon, Feb. 8, 5:35 PM
Oct. 28, 2015, 11:32 AM
- With a Q3 sales miss and EPS beat in town, NCR has cut its 2015 revenue guidance to $6.38B-$6.41B from $6.525B-$6.675B, and upped its EPS guidance to $2.70-$2.80 from $2.60-$2.80. Consensus was at $6.55B and $2.67.
- The revenue guidance cut is blamed on "continued challenges in certain developing markets and slower backlog rollouts pushing into 2016." The EPS guidance hike is attributed to "other expense, effective tax rate and share count [being] lower than previously expected."
- Cloud/SaaS software revenue rose 6% Y/Y in Q3 to $133M, while hardware revenue fell 5% to $616M. Software license/maintenance revenue rose 1% to $158M, professional services fell 3% to $143M, and other services fell 1% to $563M.
- Financial Services (51% of total revenue) was a weak spot, with sales dropping 9% Y/Y. Retail grew 7%, hospitality 5%, and emerging industries 2%. Forex had a 7% impact on total revenue growth (-2% vs. +5%).
- With reports of M&A efforts continuing to pop up, CEO Bill Nuti stated on the earnings call (transcript) NCR's strategic review is ongoing. "I anticipate it will be ongoing now for the next few months, and we'll see where it lands. But right now, there's been no change in that particular analysis."
- Q3 results, PR
Oct. 27, 2015, 4:06 PM
- NCR (NYSE:NCR): Q3 EPS of $0.78 beats by $0.08.
- Revenue of $1.61B (-2.4% Y/Y) misses by $30M.
Oct. 26, 2015, 5:35 PM
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Jul. 29, 2015, 10:32 AM
- After beating Q2 EPS estimates and slightly missing on revenue, NCR is reiterating full-year guidance for revenue of $6.525B-$6.675B and EPS of $2.60-$2.80 (consensus is at $6.54B and $2.65). However, free cash flow guidance has been hiked by $25M to $350M-$400M.
- Q3 revenue guidance of $1.63B-$1.65B is below a $1.67B consensus. A strong dollar is expected to have a 2% impact on 2015 revenue growth.
- Meanwhile, when asked on the earnings call (transcript) about NCR's strategic review, CEO William Nuti stated the review is ongoing and expected to "conclude in the near future." The remarks come amid a flurry of M&A reports.
- Cloud/SaaS revenue rose 8% Y//Y in Q2 to $135M. However, hardware revenue fell 2% to $622M, software license/maintenance revenue 2% to $168M, professional services 8% to $137M, and other services 6% to $542M. Forex had a 7% impact on total revenue growth. Within verticals, financial services revenue fell 7%, retail was flat, hospitality up 1%, and emerging industries up 2%.
- Q2 results, PR
Jul. 28, 2015, 4:35 PM
- NCR (NYSE:NCR): Q2 EPS of $0.66 beats by $0.07.
- Revenue of $1.6B (-3.6% Y/Y) misses by $20M.
Jul. 27, 2015, 5:35 PM
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NCR Corp. engages in the development, manufacture, and sale of consumer transaction solutions. It operates through the following segments: Financial Services, Retail Solutions, Hospitality, and Emerging Industries. The Financial Services segment provides automated teller machines, payment... More
Industry: Information Technology Services
Country: United States
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