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What to Expect from NCR Corp. (NCR) this Earnings Season?

Zacks Equity Research
Updated

NCR Corp. NCR is set to report second-quarter 2016 results on Jul 26. Last quarter, the company posted a positive earnings surprise of 15.2%. Moreover, it is worth noting that NCR has outperformed the Zacks Consensus Estimate in the four preceding quarters with an average positive surprise of 10.6%.

Let's see how things are shaping up for this announcement.

Factors to Consider

NCR reported mixed first-quarter 2016 results wherein the bottom line topped the Zacks Consensus Estimate but the top line missed the same.

NCR’s growing exposure in the ATM and self-service kiosk spaces is encouraging, given the tremendous growth prospects in each of these markets. Continuous product launches, growing popularity of its self-service offerings and synergies from acquisitions are the other growth catalysts. Continuous deal wins continue to drive growth. Moreover, NCR strengthened its position in the POS market through the integration of Radiant Systems.

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However, softness in the ATM business in mature markets, competition from Diebold Incorporated DBD and HP Inc., and a high debt burden remain concerns.

NCR CORP-NEW Price and EPS Surprise

NCR CORP-NEW Price and EPS Surprise | NCR CORP-NEW Quote

Earnings Whispers?

Our proven model does not conclusively show that NCR is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass earnings estimates. However, that is not the case here due to the following factors:

Zacks ESP: NCR’s ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at 65 cents per share.

Zacks Rank: NCR’s Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are a couple of companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Seagate Technology plc STX, with an Earnings ESP of +14.58% and a Zacks Rank #2

Amazon.com, Inc. AMZN, with an Earnings ESP of +37.72% and a Zacks Rank #3

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
SEAGATE TECH (STX): Free Stock Analysis Report
 
NCR CORP-NEW (NCR): Free Stock Analysis Report
 
DIEBOLD INC (DBD): Free Stock Analysis Report
 
AMAZON.COM INC (AMZN): Free Stock Analysis Report
 
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