NCR Corp. (NCR) is set to release the fourth-quarter 2013 results on Feb 6. In the previous quarter, NCR reported a positive earnings surprise of 11.76%. Let’s see how things are shaping up for this announcement.
Factors this Past Quarter
NCR reported mixed third-quarter results, with earnings per share beating the Zacks Consensus Estimate but revenues missing the same. The company also maintained its fiscal 2013 guidance, anticipating more balanced revenue growth across its segments.
NCR’s exposure into ATM and self-service kiosk spaces are encouraging, given tremendous growth prospects in these markets. Moreover, the company is gaining traction in its software business leveraging its offerings in the mobile, bill pay and online banking to various banks and other financial institutions across the globe. Continuous product launches, growing popularity of its self-service offerings and synergies from acquisitions are the positive catalysts.
However, softness in its ATM business in the mature markets, competition from Diebold Inc. (DBD), European exposure and a high debt burden are concerns.
Earnings Whispers?
Our proven model does not conclusively show that NCR is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below.
Zacks ESP: ESP for NCR is 0.00%. This is because the Most Accurate estimate is in line with the Zacks Consensus Estimate of 80 cents.
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 Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Tesla Motors, Inc. (TSLA), with Earnings ESP of +200.0% and a Zacks Rank #1 (Strong Buy).
Zillow, Inc. (Z), with Earnings ESP of +20.0% and a Zacks Rank #2 (Buy).
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