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NCR (NCR) Shares Fall as Revenue Misses Estimates

NEW YORK (TheStreet) -- NCR (NCR) was falling 8.7% to $31.94 on Friday following fourth-quarter earnings that beat forecasts but revenue that missed estimates. The company also issued earnings guidance for 2014 below Wall Street expectations.

The computer company posted adjusted earnings of 83 cents a share. Analysts surveyed by Thomson Reuters predicted earnings of 80 cents a share. NCR reported fourth-quarter revenue of $1.67 billion, missing analysts' estimates of $1.78 billion.

NCR said it estimates 2014 earnings of between $3 and $3.10 a share, while analysts estimate earnings of $3.10 for the year. The company expects non-pension operating income (NPOI) of between $900 million and $920 million for 2014.

Must read: Lagging In Post-Market Activity: NCR Corporation (NCR)

TheStreet Ratings team rates NCR CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about its recommendation:

"We rate NCR CORP (NCR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NCR's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NCR CORP has improved earnings per share by 9.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NCR CORP increased its bottom line by earning $1.29 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($2.78 versus $1.29).
  • Net operating cash flow has significantly increased by 100.00% to $0.00 million when compared to the same quarter last year. In addition, NCR CORP has also vastly surpassed the industry average cash flow growth rate of -4.27%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.04% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The net income growth from the same quarter one year ago has exceeded that of the Computers & Peripherals industry average, but is less than that of the S&P 500. The net income increased by 12.6% when compared to the same quarter one year prior, going from $87.00 million to $98.00 million.
  • You can view the full analysis from the report here: NCR Ratings Report

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