The weak global economy eroded sales of automated teller machines to North American banks by NCR Corp. and Wincor Nixdorf AG.
The two ATM manufacturers reported financial results Thursday.
NCR said its first-quarter net loss of $15 million compared with net income of $48 million the year earlier. Revenue fell 15%, to $1.01 billion, the Dayton, Ohio, company said, and it expects full-year revenue to fall 10% to 15% from last year's levels.
NCR blamed most of its first-quarter loss on slumping sales to the retail industry. NCR supplies point of sale equipment to retailers, but executives said during a conference call Thursday that many merchants have postponed accepting orders because of the economy. Sales to retailers account for roughly 40% of NCR's $5 billion in annual sales.
NCR also said the economy is affecting demand for its ATMs.
"ATM orders were light in Q1, but [this was] expected, particularly given year-on-year comparison to our best quarter ever, which was Q1 2008," Bill Nuti, NCR's chairman and CEO, said during the call.
Large national banks, including Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co., are buying NCR's advanced, envelope-free ATMs, Nuti said, though regional banks are moving more slowly.
"Capital investment by banks is relatively solid," he said. "This is predominantly true of large banks that are continuing to roll out deposit automation capability. National and regional banks, depending on their exposure to bad assets, are being a bit more cautious. Midsize banks are not standing still, and there are active pilots in place, but purchase decisions are being made more slowly."
Nuti was optimistic about ATM sales. "As the financial and credit markets begin to recover, our opportunities should improve," he said.
He also said that NCR is trying to control costs during the downturn. "The company is focused on areas within our control, such as reducing our operating expenses, improving our working capital performance and taking tangible steps to build our business," he said.
NCR was the worlds's biggest ATM manufacturer, based on shipments, in 2007.
Gil Luria, an analyst at Wedbush Morgan Securities in Los Angeles, downgraded NCR's stock Thursday, to "hold" from "strong buy." "We believe that once NCR's markets recover … , it may return to success," he wrote in a research note.
Wincor Nixdorf in Paderborn, Germany, reported a profit for the first six months of fiscal 2009, ended March 31, of $83.5 million, up 5% from the year earlier. Revenue grew 6.7%, to $1.6 billion.
The German company, which also cited the slumping economy's impact, said its ATM sales in the Americas fell in the first half by 1%, to $133.3 million.
Wincor Nixdorf was the No. 2 ATM maker by volume in 2007.
Eckard Heidloff, Wincor Nixdorf's president and CEO, said it remains unclear how long the global economic slump will last.
"On the basis of what we know up to now, we are holding firm to our forecast that our net sales and operating profit will be roughly on par with the previous year," he said in a press release.
Wincor Nixdorf reported in November revenue of $3 billion in fiscal 2008.
Heidloff said that the results in the six-month period were uneven, with most of the gains coming in the first fiscal quarter; second quarterrevenue increased by 1%.
