Why NCR Corporation Stock Lost 14.5% in October

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What happened

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NCR Corportation (NYSE: NCR) stock fell 14.5% in October according to data provided by S&P Global Market Intelligence. Shares dipped following the release of its third-quarter results that arrived with a lowered full-year earnings outlook.

So what

NCR's October 19 earnings release saw it deliver earnings per share of $0.93, which topped the average analyst estimate of $0.90, but a downward revision for its full-year targets weighed on the stock.

Prior to its recent earnings report, NCR was calling for full-year earnings between $3.32 and $3.42 on sales between $6.63 billion and $6.75 billion. However, the company lowered its outlook to earnings per share of between $3.10 and $3.20, and its full-year sales target to between $6.48 billion and $6.53 billion due to weakness in the ATM market. The segment's sales fell 17% year over year in the third quarter.

Now what

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NCR expects that its ATM business will wind up down roughly 20% year over year at the close of 2017, but management also believes the segment will rebound next fiscal year. The company is focused on building its recurring revenue streams by expanding its cloud-based offerings, but hardware remains at the center of NCR's business, so its medium-term performance will likely be closely tied to whether sales for its ATM and self-checkout devices and their related software components improve. 

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends NCR. The Motley Fool has a disclosure policy.