Why NCR Corp. Stock Is Soaring Today
Image source: NCR Corp.
What happened
Shares of NCR Corp. (NYSE: NCR), a provider of consumer transaction technologies, jumped on Wednesday following the company's third-quarter report. NCR handily beat analyst estimates for both revenue and earnings, which sent the stock up about 18% by 11:45 a.m.
So what
NCR reported quarterly revenue of $1.68 billion, up 4% year over year and $50 million higher than the average analyst estimate. Adjusted for currency and divestitures, revenue rose at a faster 10% rate. NCR recorded adjusted growth across its entire portfolio of products, with software revenue up 7%, services revenue up 6%, and hardware revenue up 16%.
NCR produced non-GAAP (adjusted) earnings per share of $0.87, up from $0.78 during the prior-year period and $0.06 better than what analysts were expecting. The company managed to keep operating expenses roughly flat on a year-over-year basis, which led to a GAAP operating margin of 11.3%, up from 10.4% during the third quarter of 2015. A higher tax rate largely offset this margin expansion, but a lower share count due to share repurchases boosted the per-share numbers.
NCR CEO Bill Nuti summed up the company's third quarter:
Now what
In addition to beating estimates for the third quarter, NCR raised its full-year revenue and earnings guidance. The company now expects to produce revenue in the range of $6.47 billion to $6.5 billion, up from a previous guidance of $6.325 billion to $6.4 billion. Higher expected revenue in all segments and a lower negative impact from currency are the drivers behind the guidance boost.
Non-GAAP EPS is now expected to be between $2.97 and $3.02 for the full year, up from previous guidance of $2.90 to $3.00. NCR also reaffirmed its free cash flow guidance, expecting to produce between $425 million and $475 million for the full year.
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