NCR Grabs Netkey

A recent press release from NCR Corp. (NCR - Analyst Report) confirms that it has purchased the assets of a market-leading provider of kiosk and digital signage software applications, Netkey, Inc. for an undisclosed amount. We believe that after acquisition NCR is expected to integrate Netkey’s software with its own technologies to deliver world class enterprise solutions, including both hardware and software solutions to its clients.

This acquisition is expected to provide NCR with a good digital signage application platform, which is built on the same platform as Netkey’s kiosk applications, thereby helping the deployment and support of NCR’s solutions.

It will also enable NCR to help customers across multiple industries with kiosk and digital signage solutions that deliver more effective transactions, promotions and information which is the main reason for the merger. The more customer-friendly solutions are expected to attract new customers.

This should be a positive in the current environment, especially considering the fact that the third quarter numbers were disappointing.  NCR reported revenues of $1.14 billion, a decrease of 18.0% from $1.37 billion in the year-ago quarter. This decrease included approximately 1 percentage point of negative impact from foreign currency translation. The year-over-year revenue comparison was impacted by global economic conditions which weakened the global financial services, retail and hospitality industries.

The company reported substantial revenue declines across all its geographic regions namely, the Americas, Europe Middle East and Africa (EMEA), and Asia Pacific and Japan (APJ). This apart, NCR expects a dull 2009, which is expected to result in a revenue decline of 12% to 14% on a constant currency basis compared with 2008. Although the recent acquisition is expected to positively influence the revenue stream in the long run but the near-term outlook of the company remains bearish.