US ATM manufacturer NCR has posted a hefty 55% drop in fourth quarter net income, reflecting the spin-off of the Teradata data warehousing business in October.
The vendor's net profit for the fourth quarter ending 31 December 2007 fell to $79 million, compared with $174 million a year ago. Prior year results included earnings from the Teradata unit.
Fourth quarter earnings from continuing operations came in at $86 million, compared to $95 million in the fourth quarter of 2006.
Overall, NCR's fourth quarter revenue rose 13% to $1.52 billion from $1.34 billion in 2006.
NCR's ATM division generated fourth quarter revenue of $537 million, a 14% increase from Q4 revenues of $472 million in 2006. NCR says the increase was driven by strong growth in the Emea region as well as in the Americas.
The vendor's 'retail store automation' unit posted Q4 revenue of $331 million, up 28 percent from the $258 million it report in the year-ago quarter. The firm's customer services revenue came in at $531 million, a nine per cent increase on the $485 million recorded in the fourth quarter of 2006.
"NCR delivered a strong performance in its first quarter following the Teradata spin off," says NCR chairman and chief executive officer Bill Nuti. "More balanced execution in the quarter helped us maintain progress in each of our strategic focus areas: driving profitable revenue growth, increasing our productivity and using our strong balance sheet for the benefit of long-term shareholder return."
Looking ahead, NCR expects 2008 earnings from continuing operations to be in the range of $1.48 to $1.55 a share and revenue growth from continuing operations to be in the range of three to five per cent.
Furthermore, Nuti says he expects product development investments made in 2007 "will make 2008 the biggest new product launch year since the company's spin off from AT&T".
NCR shares fell 3.67%, or 83 cents, to $22.39 in morning trading in the US.
The stock took a battering earlier this month and fell to a 52-week low after an analyst downgraded the NCR amid concerns that banks in North America - particularly larger firms that have more ATMs and greater exposure to the subprime crisis - are cutting back expenditure on ATM upgrades.