NCR Corp. (NCR) is set to report fourth-quarter 2014 results on Feb 10. Last quarter, the company posted a positive earnings surprise of 1.5%. Moreover, it is worth noting that NCR has outperformed the Zacks Consensus Estimate in all the four preceding quarters with an average positive surprise of 2.6%.
Let us see how things are shaping up for this announcement.
Factors to Consider
NCR reported better-than-expected third-quarter 2014 results. The company also saw margin expansion aided by higher mix of software business.
Recently, the company unveiled a new self-service checkout solution, NCR SelfServ 90. NCR’s SelfServ 90 ensures convenience, thereby attracting customers and inspiring loyalty.
Furthermore, the company stated that its point of sale (POS) solution, NCR RealPOS 40 has been chosen by the leading People’s Department Store of Zhangjiagang City Co., Ltd. — the oldest commercial enterprise of Zhangjiagang City — for its stores. NCR further revealed that Shanghai Anmao Information Technology Company, its channel partner in China, is installing the devices at People’s Department Stores in Hangzhou City.
NCR’s growing exposure in the ATM and self-service kiosk spaces is encouraging, given tremendous growth prospects in the respective markets. Continuous product launches, growing popularity of its self-service offerings and synergies from acquisitions are the catalysts. Continuous deal wins also remain NCR’s strong point. Moreover, NCR has strengthened its position in the POS market through the integration of Radiant Systems.
However, softness in the ATM business in mature markets and competition from Diebold, Inc. remain concerns.
Earnings Whispers?
Our proven model does not conclusively show that NCR is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, that is not the case here due to the following factors:
Zacks ESP: NCR’s ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at 80 cents per share.
Zacks Rank: NCR’s Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies, which are worth considering as our model shows that they have the right combination of these two elements:
- Procera Networks, Inc. (PKT) with Earnings ESP of +25.00% and a Zacks Rank #2 (Buy)
- Criteo SA (CRTO) with Earnings ESP of +4.00% and a Zacks Rank #3
- Demandware, Inc. (DWRE) with Earnings ESP of +25.00% and a Zacks Rank #3
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