NCR Corp. saw increased demand for its core services worldwide during the second quarter as the ATM and kiosk maker continued to put emphasis on marketplace innovation to help win new business.
“The momentum and underlying strength across our [product] business is supported by the solid performance of our [financial] services group during the quarter,” Bill Nuti, NCR chairman and CEO, told analysts July 21 during a conference call to discuss the company’s earnings.
The company’s financial services segment, which includes ATMs, generated second-quarter revenue of $729 million for the three months ended June 30, up 15.3% from $632 million in 2010. NCR did not detail its revenue by region.
“We believe NCR remains poised to exceed expectations as core ATM and retail businesses see accelerating growth in 2011,” Gil Luria, an analyst at Los Angeles-based Wedbush Securities Inc., wrote in a research note. “We believe this value is further enhanced by the acquisition of Radiant Systems.”
Nuti expects NCR’s retail and hospitality segment to benefit from the pending acquisition of software vendor Radiant Systems Inc. (
The deal could help the company grow market share to 25% to 30% of U.S. restaurant point-of-sale hardware and software from an existing position of about 5% to 10%, Luria said at the time of the announcement.
“We’ve talked about hospitality being a natural growth vertical for NCR, and by the virtue of this transaction we will become an immediate market share leader,” Nuti said.
NCR’s retail and hospitality segment, which includes point-of-sale products for merchants and restaurants, reported revenue of $449 million, up 3% from $438 million during the same period last year.
NCR’s Scalable Deposit Module ATMs highlighted growth in North America. The machines enable bank customers to deposit up to 50 checks and bank notes, in any orientation, at a single time. The company has secured orders for some 7,000 of these machines since the company introduced the product in October.
“We believe the pickup in U.S. ATM orders toward the end of 2010 and through [the second quarter] will translate to growth acceleration and margin expansion as the year progresses,” Luria wrote.
Russia-based VTP Bank played a role in NCR’s international growth through its use of software to extend the functionality of its ATMs. The software helps to VTP to create marketing campaigns based on customer data taken from a customer relationship management system. The bank has some 300,000 customers.
NCR reported net income of $35 million for the quarter, up 75% from $20 million for the same period last year. Revenue was up 12%, to $1.31 billion from $1.17 billion.
NCR expects full-year 2011 revenues to increase from 6% to 8%, up from the previous guidance of 5% to 7%.
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