ATM and cash dispenser maker NCR Corp. (NCR) reported Tuesday a profit for the first quarter that tripled from last year, reflecting improved margins, significantly lower pension expense and revenue growth. Both adjusted earnings per share from continuing operations and quarterly revenues topped analysts' expectations. The company also raised its earnings guidance for the full-year 2013, while maintaining annual revenue growth forecast.
"We are executing well across our lines of business, led by strong momentum in our Retail Solutions and Hospitality segments. During the quarter, we closed the acquisition of Retalix, strengthening our retail software and services offerings," Chairman and CEO Bill Nuti said in a statement.
Duluth, Georgia-based NCR reported net income of $61 million or $0.36 per share for the first quarter, compared to net loss of $19 million or $0.12 per share in the prior-year quarter.
Income from continuing operations was $62 million or $0.37 per share, compared to loss from continuing operations of $10 million or $0.06 per share in the corresponding quarter last year.
The latest quarter's results primarily include $0.02 per share of pension expense, while the year-ago quarter included $0.46 per share of the same expense.
Excluding pension and one-time items, adjusted income from continuing operations was $129 million or $0.54 per share, compared to $101 million or $0.47 per share in the year-ago quarter.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter grew 13 percent to $1.41 billion from $1.24 billion in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $1.34 billion. Revenue includes a negative impact of 2 percent as a result of foreign currency translation.
Financial Services revenues grew 3 percent to $714 million, and retail solutions segment revenues surged 41 percent to $489 million from last year, aided by the contribution from the Retalix, Ltd. acquisition that was completed on February 6, 2013. Retalix strengthened the company's retail software and services offerings.
Hospitality revenues grew 6 percent to $131 million, while emerging industries revenues declined 15 percent to $76 million from last year.
Operating margin for the quarter expanded 750 basis points to 6.0 percent as gross margin improved 590 basis points to 26.2 percent from last year, driven by a 35 percent growth in software revenues.
Income tax expense for the quarter was $2 million, compared to an income tax benefit of $21 million last year.
Looking ahead to the second quarter, NCR expects non-pension income from operations in a range of $126 million to $131 million.
For fiscal 2013, NCR raised its guidance for adjusted earnings from continuing operations to a range of $2.70 to $2.80 per share from the prior forecast range of $2.65 to $2.75 per share, while maintaining annual revenue growth guidance between 9 to 11 percent, on a constant currency basis.
Street is currently looking for full-year 2013 earnings of $2.71 per share on revenues of $6.31 billion.
NCR closed Tuesday's regular trading session at $27.27, up $0.42 or 1.56% on a volume of 1.98 million shares. The stock gained a further $1.03 or 3.78% in after-hours trading.
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