NCR Corporation has announced strong operating performance for the first quarter ended March 31, 2001, including a 10% increase in revenue to $1.38 billion. On a constant currency basis, revenue increased 13%. Operating income exceeded expectations.
The company reported net income of $117 million, or $1.18 per diluted share for the first quarter, including the effects of a favorable tax adjustment, the implementation of SFAS 133, integration charges related to the October 2000 acquisition of 4Front Technologies and a bad debt write-down related to an ATM customer.
Excluding these items, operating earnings were $22 million compared to a $4 million operating loss in the year-ago quarter. Related net income and earnings per diluted share grew 83% to $11 million and $0.11, respectively.
Highlights for the quarter
• The 10% broad-based revenue growth was generated from all key solutions, including 21% in Data Warehousing, 18% in Retail Store Automation and 8% in Financial Self Service.
• Data Warehousing added new customers at a growth rate in excess of 20% over the prior year. Broad-based revenue growth across multiple regions and industries was led by significantly higher software and professional consulting services revenues.
• Retail Store Automation delivered strong earnings improvement, driven by productivity gains and excellent revenue growth led by new products.
• Financial Self Service experienced revenue growth across regions and market segments with improved profitability.
• A significant increase in high-availability services helped deliver strong growth in Customer Services.
• Overall, revenue growth was robust across regions with Americas up 8%, Europe/Middle East/Africa up 14% (20% on a constant currency basis) and Asia/Pacific (including Japan) up 8% (18% on a constant currency basis).
• Order activity was strong, resulting in good backlogs entering the second quarter.
• The $26 million operating earnings improvement from a $4 million loss in last year’s first quarter was achieved despite $13 million higher goodwill expense.
• Other income/expense was lower than anticipated primarily because of lower interest income.
Commenting on the company’s performance, NCR chairman and CEO Lars Nyberg said: “I am extremely pleased with the strong operating performance delivered by each of our key solutions. The strength of our earnings this quarter clearly demonstrates that we are now a growth company and is particularly impressive since it was achieved in a challenging economic environment.”
“We continue to see good momentum in each of our key businesses, but we are not immune to an economic slow-down. However, given the current environment, we believe we can meet our targets.”
Second quarter 2001 revenue growth is targeted at 5%, including 15-20% revenue growth from Data Warehousing. Retail Store Automation, Financial Self Service, and Customer Services should generate revenue growth in the low single-digits in the second quarter. NCR is targeting 20% growth in operating income for the second quarter; however, other income will be minimal.
The company expects interest and other income to improve in the second half of the year but only anticipates $20 million for the full year. NCR is comfortable with the current range of analysts’ earnings-per-share estimates; based on these ranges, analysts’ consensus estimates for full-year earnings per share is $2.64.
About NCR Corporation
NCR is a leader in providing Relationship Technology solutions to customers worldwide in the retail, financial, communications, manufacturing, travel and transportation, and insurance markets. NCR employs 33,200 in more than 100 countries, and is a component stock of the Standard & Poor’s 500 Index.