NCR Corp. today reported a fourth quarter net loss on lower revenues as demand for ATMs slumped in the United States, the Caribbean and Latin America.
William Nuti, NCR chairman and CEO, does not expect much improvement in ATM demand this year in the U.S. financial-services market, although he told analysts this morning sales look brighter overseas. NCR’s ATM-sales problems in the U.S. will compound, for a time, because large banks deploying intelligent-deposit ATMs will complete installations this year, Nuti said during the conference call.
“And we would say that the midsize banks, the regional banks, the national banks, certainly will not pick up the slack left behind by the large banks, but we think they will start to become very active this year and going into 2011,” he said.
Nuti said he expects sales to pick up in Western Europe, Middle East/Africa, Brazil, India and China, where the company is developing ATMs specifically for the country’s banks.
NCR reported a net loss of $56 million for the quarter ended Dec. 31; the company reported net income of $56 million for the same three-month period in 2008. For the whole year, NCR reported a net loss of $33 million; it reported net income of $228 million for 2008. The company reported fourth-quarter revenue of $1.34 billion, down 5.6% from $1.42 billion during the same period a year earlier. Revenue for the whole year totaled $4.61 billion, down 13.2% from $5.31 billion in 2008.
Besides the flat U.S. ATM market, also contributing to the fourth-quarter loss was $41 million in employee pension expenses, $151 million for an environmental cleanup of the Fox River near Green Bay, Wis., $6 million in expenses to pay for NCR’s move to Duluth, Ga., from Dayton, Ohio, and a $24 million impairment charge involving an undisclosed investment.
The company’s pension was underfunded by almost $1 billion at the end of 2009, and it has become a hot topic of concern for NCR’s senior management. “Pension expense had a significant impact on our 2009 reported earnings, Nuti said. “Not only has noncash pension expense had impact on NCR’s earnings, we believe it has had a significant impact on our share price.”
Although NCR anticipates improved ATM sales outside the U.S. later this year, Blockbuster Express, NCR’s kiosk DVD-rental business, will be a major U.S. revenue driver this year, Nuti said.
