NCR Corp.’s investments in improving its technology are helping it recover from the economic downturn by sparking more demand from retail banks, the ATM and kiosk maker noted Feb. 3 during a quarterly earnings call with analysts.
Last year, the Duluth, Ga.-based company announced an intelligent deposit module that enables users to deposit cash and checks, in bulk, from a single slot. Before this module, envelope-free deposits required two slots–one for cash and another for checks.
The company is hoping that as bigger banks upgrade their ATMs to the single-slot feature, smaller banks will feel compelled to play catch-up.
Still, that does not mean NCR is riding high. William Nuti, the company’s chairman and chief executive, said during the call “it took tremendous resolve” just to come this far.
“Managing through this past fiscal year just completed was certainly challenging,” Nuti said. “We had to remain focused on our short- and long-term goals” while “disruptions of historic proportions” stifled the company.
NCR concedes it lost market share to rival Wincor Nixdorf AG of Paderborn in 2009. The Germany-based ATM maker grabbed business away from NCR with big orders from JPMorgan Chase & Co., which deploys about 16,000 ATMs in the U.S., and Wells Fargo & Co., NCR said.
NCR has gained back some of that lost business with its SDM technology–Chase says it plans to place hundreds of machines equipped with the module in branches nationwide (
This month, NCR also said that it had sold 125,000 SelfServ intelligent-deposit ATMs since their introduction in 2008.
In the last three months of 2010, NCR said it swung to a profit of $38 million, up from a $57 million loss a year earlier. Revenue was up 5%, to $1.4 billion (
“I think they turned a corner,” said Wedbush Morgan analyst Gil B. Luria, “They more profitable than everybody thought.”
Still, pension liabilities continued to plague NCR. The company said its international and executive pension plan was underfunded by $997 million at the end of 2010, and it plans to contribute $125 million to its pension plans this year.
The financial services business is still NCR’s largest, executives said, though its self-serve DVD entertainment kiosks are its biggest prospect for future growth. At the end of last year, NCR had about 8,000 DVD kiosks across the country.
Luria said he had doubts about NCR’s prospects in the entertainment market.
“NCR is a very good ATM company,” said Luria. “They know nothing about being an entertainment retailer, and they are learning that the hard way by setting expectations and not living up to them.”
Entertainment and airline check-in kiosks represent what will drive NCR in the coming years, Nuti said. “We are not out of the woods, yet,” he said. “But [we] certainly expect [2011] will be a better year for NCR.”
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