Shares of NCR Corp. (NCR - Analyst Report) reached a new 52-week high of $30.05 on Friday, May 3, 2013 following solid first quarter 2013 results announced on Apr 30.
The closing price of the technology services provider on May 3 was $29.84, representing a robust one-year return of about 28.0% and a decent year-to-date return of about 13.9%. Average volume of shares traded over the last three months stands at approximately 1540.5K.
NCR delivered positive earnings surprises in the last four quarters with an average beat of 14.5%. This Zacks Rank #2 (Buy) company has a market cap of $4.9 billion and a long-term expected earnings growth rate of 14.8%.
Retail Solutions Drive NCR’s First Quarter
NCR reported adjusted earnings of 54 cents per share, surpassing the Zacks Consensus Estimate by 35.0% and the year-ago quarter by 14.9%. The beat was mainly attributable to solid performance in NCR’s Retail Solutions segment.
Revenues of $1.41 billion grew 13.3% year over year, led by a 41.0% rise in Retail solutions and a 16.0% increase in Hospitality revenues. However, the result was partially offset by a 15.0% revenue decline from the Emerging Industries segment.
During the quarter, NCR completed the acquisition of Retalix (announced in Dec 2012), which contributed significantly and supported the growth of Retail Solutions segment.
Given the solid first-quarter results, growing product demand and continued momentum in Retail Solutions and Hospitality segments, NCR raised its fiscal 2013 guidance.
Revenues for fiscal 2013 are expected to grow in the range of 9.0%–11.0%. NCR expects adjusted earnings per share in the range of $2.70–$2.80, up from previous expectation of $2.65–$2.75.
Following the first-quarter earnings release, analysts seem to be enthusiastic about NCR’s performance and its new product launches.
Six and three estimates for 2013 and 2014, respectively, moved upward over the last 7 days. There were no downward estimate revisions for 2013. However, one estimate moved downward for 2014 in the past 7 days.
NCR’s growing exposures into ATM and self service kiosks spaces are encouraging, given tremendous growth prospects in the respective markets. Though stiff competition in ATM space, European exposure and high debt burden are concerns, we are optimistic on the stock given continuous products launches and synergies from acquisitions.
Other Stocks to Consider
Other stocks in the technology industry that are currently performing well and have a good visibility include Symantec Corp. (SYMC - Analyst Report), Mentor Graphics (MENT - Snapshot Report) and Micron Technology Inc. (MU - Analyst Report), having a Zacks Rank #2 (Buy).