NCR Corporation (NYSE:NCR) today announced that it anticipates third-quarter earnings to be $1.16 to $1.18 per share, which includes $0.73 of earnings per share from the favorable settlement of prior-year tax audits.
Excluding the benefit of the tax item, third-quarter earnings per share is expected to be $0.43 to $0.45, more than an 85 percent increase from earnings of $0.23 per share in the third quarter of 2004. NCR's earnings guidance for the third quarter of 2005 was $0.28 to $0.33 per share.
NCR expects to report third-quarter revenue of approximately $1.49 billion to $1.50 billion, an increase of 3 percent from the third quarter of 2004. The year-over-year revenue increase included the benefit of 1 percentage point from foreign currency fluctuations.
Revenue and profitability in the company's Teradata Data Warehousing business was stronger than anticipated as some transactions forecasted as fourth-quarter events were consummated in the third quarter. While revenue growth in Financial Self Service was less than previously expected, profitability improved significantly from the second quarter of 2005.
In addition, the company's cost reduction actions are progressing ahead of schedule. Of the $350 million of cost reduction the company expected to achieve by the end of 2006, more than $300 million is now expected to be achieved by the end of 2005.
Including the net benefit of non-operational items, NCR is increasing its earnings expectation for full-year 2005 to $2.53 to $2.58 per share from its previous guidance of $1.75 to $1.80 per share. Excluding the net benefit of these items(1), NCR is increasing its expectation for full-year earnings per share to the $1.52 to $1.57 range from its previous guidance of $1.47 to $1.52, which equates to more than a 60 percent improvement from NCR's full-year 2004 earnings on a comparable basis.
The company now anticipates full-year 2005 revenue growth in its Teradata Data Warehousing business to be 7 percent to 8 percent due to better-than-expected results in the third quarter. Full-year revenue growth guidance for Financial Self Service is being lowered to 0 percent to 2 percent, due to less-than-expected growth from demand drivers, the effect of price erosion and the company's continued focus on price discipline.
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