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Will NCR Deliver a Positive Surprise This Earnings Season?

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NCR Corporation is slated to release its fourth-quarter 2017 results on Feb 8. The question lingering on investors’ minds is whether this consumer transaction technology provider will be able to deliver a positive surprise.

Notably, NCR has an impressive earnings surprise history. In the trailing four quarters, the company surpassed the Zacks Consensus Estimate on all the occasions, with an average positive earnings surprise of 8.9%.

Let’s see how things are shaping up prior to this announcement.

What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

NCR has a Zacks Rank #3 and its Earnings ESP is +2.62%. Therefore, the company is likely to deliver a positive surprise this quarter.

What to Expect?

The Zacks Consensus Estimate for fourth quarter earnings is pegged at 86 cents per share. Additionally, analysts polled by Zacks project revenues of roughly $1.74 billion.

Factors to Consider

The company enriched its product portfolio during the quarter with the launch of a mobile point-of-sale (POS) solution called Ring Up by NCR Silver, whose payment processing is powered by Worldpay. This POS solution is targeted at U.S. based micro businesses. The company also launched a new “end-to-end mobile payment solution” in the month of October.

Additionally, the company, in partnership with Samsung Electronics America, launched NCR Silver Quantum, “all-in-one point-of-sale (POS) commerce station featuring an integrated payment device with mobile wallet acceptance capability.”

Notably, during the quarter, the company announced that its digital transformation platform will be enriched by “an 800-store chain customer”. Moreover, a prominent supermarket chain in Israel, named Bitan Wines Group, is looking to install NCR FastLane SelfServ Checkouts. Arizona based Tucson Federal Credit has implemented NCR’s Interactive Teller software for the betterment of customer experience at different branch locations.

Furthermore, the company is also looking for growth opportunities via expansion of its channel program. Lastly, the company completed divestment of the remaining IPS assets to Turbon Group of Companies. We believe the completion of the transaction is a testament to the fact that NCR is focusing on growth in the software and services sector.

However, we remain cautious about the weakness in the ATM business as large customers across North America, India, the Middle East and Africa delayed their spending.

NCR Corporation Price and EPS Surprise

NCR Corporation Price and EPS Surprise | NCR Corporation Quote

Other Stocks to Consider

Here are a couple of companies which, per our model, also have the right combination of elements to post an earnings beat this quarter: 

NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +6.87% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Materials, Inc. (AMAT - Free Report) , with an Earnings ESP of +0.57% and a Zacks Rank #2.

Agilent Technologies, Inc. (A - Free Report) , with an Earnings ESP of +1.98% and a Zacks Rank of #3.

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