NCR Corp’s post-AT&T recovery remains painfully slow and even though the company posted its first full-year profit since 1992 both its fourth quarter and full-year revenue declined again on a comparative basis and it missed its expectations for 1997 by a mile. Chairman and CEO Lars Nyberg admitted his 1997 goals were overly optimistic, and despite a major restructuring and cost- reduction plan outlined last October which will see 1,000 employees laid off by the end of 1998, a three-year plan he instituted at the beginning of last year to achieve 9% to 12% revenue growth and a gross margin in the mid-thirties is already in tatters. Recognizing the picture is getting ever bleaker – NCR was an $8.46bn company just four years ago – Nyberg warned we don’t have for ever. Although NCR’s financial and retail businesses grew for the first time in four years – up 10.7% and 6% respectively at $474m and $1.06bn respectively – it’s the computer systems business which is still crippling the company’s ability to get back into growth. NCR says its Teradata business grew substantially – although it didn’t break out any numbers – but sales of mid-range servers dragged computer systems revenue down 17% to $1.14bn from $1.39bn for the year – down 21% to $356m from $453m in the quarter. It attributes much of the decline to a reduction in orders from former parent AT&T but claims there will be no similar impact in 1998. Computer system margins were up a point at 30.7%. NCR’s pinning a great deal of hope on Teradata and the data warehousing market, which it says will over compensate for further declines it expects in other sections of its computer business through 1998. Overall, gross margins slipped to 27.4% from 29.6% a year ago. NCR reported net income up 414% at $36m over $7m last time which included a gain of $55m due to restructuring and an $82m tax charge, on revenue which declined 2% to $1.99bn from $2.04bn. Earnings per share were $0.35 compared with $0.07. Net income for the year was $7m, up from a loss of $109m last year, on revenue down 5.4% at $6.58bn from $6.96bn in 1996. Orders were down in America and Asia Pacific while Europe was either up by a single digit or flat. NCR has $1.2bn cash, slightly up on last year and says it will re- evaluate a share buyback plan later in the year when the implication of a new tax situation may improve.
