NCR Corp. Signs Barclays Deal - Analyst Blog

Technology and solutions provider NCR Corp. (NCR) announced that it would be offering management and maintenance services for Barclays Bank plc’s automated teller machines (ATMs). Financial details of this two-year deal were not disclosed.

As per the terms of the deal, NCR Corp. will extend its services to Barclays’ 550 remote and host-operated ATMs situated in the U.K. NCR Corp.’s managed services will include monitoring of the ATM network, managing the availability of cash, maintenance of software and help desk services.

Apart from extending its own services, NCR Corp. will assist Cash-In-Transit management company, Loomis, in managing and maintaining the availability and refilling of cash into the aforementioned ATM machines. NCR Corp.’s services will be offered through the company’s customer care center situated in Glasgow.

With mounting competition, leading financial institutions are continuously trying to increase customer interaction, cut costs, generate higher revenues and improve efficacy through their self-service channels. All of these goals can be realized by deploying NCR Corp.’s diversified solutions aimed at self-service kiosks.

NCR Corp.’s service suites ensure customer satisfaction. Moreover, they are expected to boost the customer retention rate for Barclays and generate steady revenue streams for NCR Corp.

We believe NCR Corp.’s association with Barclays is reflective of the trend to upgrade ATM machines across the world to enhance payment security and customer service. The trend also indicates a slow but gradual increase in capital-intensive purchases, such as ATMs and physical security products in the U.S., following the recent recession.

NCR Corp. posted decent second quarter results, with both revenues and earnings growing modestly from the year-ago quarter. Revenues increased across all geographic regions, driven by an improvement in macroeconomic conditions, especially in retail, financial services and hospitality industries.

While we are encouraged by the company’s market leadership, successful acquisitions, new product introductions and new business ventures, we believe that near-term visibility is limited. We expect NCR Corp.’s robust business model and restructuring initiatives to drive growth across all its segments in the medium to long term.

We maintain our long-term Neutral rating with a short-term Zacks #3 Rank ('hold') on NCR Corp.