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What's in Store for NCR Corp. (NCR) this Earnings Season?

Zacks Equity Research

NCR Corp. NCR is set to report fourth-quarter 2016 results on Feb 9. Last quarter, the company posted a positive earnings surprise of approximately 7.41%. Moreover, it is worth noting that NCR has outperformed the Zacks Consensus Estimate in the four preceding quarters with an average positive surprise of 9.77%.

Let's see how things are shaping up for this announcement.

Factors to Consider

We believe that NCR’s position in the self-service kiosk space is encouraging, given tremendous growth prospects. The company’s regular product launches enable cloud providers to gain access to its IT infrastructure and service support in a highly flexible and cost-effective way. Also, the growing popularity of its self-service offerings, deal wins and synergies from acquisitions should boost results in the to-be-reported quarter.

During the fourth quarter, the company won contracts from various organizations such as SkyBus Melbourne, Nedbank, Yo! Sushi, and many more. We believe that these deals will aid the company’s fourth-quarter revenues.

However, softness in the ATM business in mature markets, competition from Diebold Incorporated DBD and HP Inc., and a high debt burden remain concerns.

Earnings Whispers

Our proven model does not conclusively show that NCR is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Earnings ESP for NCR is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.03 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NCR has a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

NCR Corporation Price and EPS Surprise

NCR Corporation Price and EPS Surprise | NCR Corporation Quote

Stocks to Consider

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

Pandora Media, Inc. P, with an Earnings ESP of +10.81% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CenturyLink, Inc. CTL, with an Earnings ESP of +1.79% and a Zacks Rank #3.

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NCR Corporation (NCR): Free Stock Analysis Report
 
Diebold, Incorporated (DBD): Free Stock Analysis Report
 
CenturyLink, Inc. (CTL): Free Stock Analysis Report
 
Pandora Media, Inc. (P): Free Stock Analysis Report
 
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