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NCR Boosts Partners' Networking

by Zacks Equity Research

September 10, 2012 | Comments : 0 Recommended this article: (0)

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The ATM manufacturer NCR Corporation ( NCR - Analyst Report ) is extending its network of channel partners. The company recently announced that independent retailers now have access to NCR point-of-sale (POS). The POS provides maintenance services to the end user through a network of distributors.

In this particular offering, channel partners can serve as a one-stop shop offering customized solutions related to hardware-software-networking to independent retail customers. Ultimately this leads to improved recurring revenue streams through improved transaction efficiency and higher customer demand for the small retailers.

Apart from improving its channel partner efficiency, the company also introduced a new video teller service into its Canadian ATMs. This particular service enables customers to have a live discussion with the remote teller at the ATM. Therefore the technology enables consumers to access branch services after the designated office hours.

The Canadian financial institution FirstOntario Credit Union is looking to implement new solutions to improve their productivity. Sensing this, NCR is coming up with new technology to encash on the situation.

The company is aggressively working with banks, financial institutions and credit committees in Canada to improve their efficiency and end-user experience. This is a mutually beneficial association as both NCR and the banks are benefiting in the same way.

Although the company is growing, its sales tend to be seasonal, with strong sales in the fourth quarter followed by weakness in the first. Such seasonal nature of the business leads to fluctuation in cash flows and makes it difficult for the company to predict its working capital requirements accurately.

Moreover, challenges faced by the global financial services and retail industries, the successful integration of Radiant and potential investor concerns regarding pension expenses are other headwinds.

Although the restructuring initiatives and new business strategies have started impacting results, we believe that the company should reduce its debt balance to further improve its operating performance, and must come up with new strategies to compete against Diebold Inc. ( DBD - Snapshot Report ) .

The company has a Zacks #3 Rank, implying a short-term Hold rating.

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