Q2 profits down but sales up at NCR

The 4 percent increase in revenue from the second quarter of 2005 included minimal impact from currency fluctuations.

NCR reported second-quarter net income of $78 million, or $0.42 per diluted share, which included $6 million, or $0.02 per diluted share, of incremental expense related to stock-based compensation. This compares to $127 million of net income, or $0.67 per diluted share, reported in the second quarter of 2005. Results for the second quarter of 2005 included $64 million of benefit from the resolution of prior-year tax audits, $19 million of non-cash incremental pension expense associated with an early-retirement program offered in NCR's Customer Services business, as well as $9 million of net benefit from other non-operational items described below. Excluding these items, NCR's earnings per share in the second quarter of 2005 was $0.37.

"Revenue growth in NCR's data warehousing, financial and retail segments shows good demand for our products, while our overall profitability continues to improve as we implement operational enhancements," said Bill Nuti, president and chief executive officer of NCR.

"Our Customer Services business is clearly showing the benefits of our efforts to both drive a higher proportion of revenue from servicing NCR-branded products and to make our services infrastructure more efficient. This work continues, along with other targeted initiatives focused on improving growth and profitability across all of our businesses."