NCR, Here We Are: Fool by Numbers

On Oct. 26, IT service provider NCR (Nasdaq: NCR  ) released third-quarter earnings for the period ended Sept. 30, 2006.

• Growth in the Teradata Data Warehousing segment and continued progress in the Customer Services business led to 1.3% growth in net sales.
• Net margin declined by 895 basis points to 5.87%.
• EPS slipped 58.5%, because of stock option compensation expenses and the absence of a tax benefit (which it had in the year-ago quarter).
• FCF declined 10.9% as a result of certain real estate-related initiatives and increased investment in software development.
• NCR carries a three-star rating in Motley Fool CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q3 2006	Q3 2005	Change
Sales	$1,521	$1,517	$1,498	1.3%
Net Profit	--	$89	$222	(59.9%)
EPS	$0.43	$0.49	$1.18	(58.5%)
Diluted Shares	--	181	189	(3.9%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	29.00%	29.11%	(0.11)
Operating Margin	7.78%	7.48%	0.30
Net Margin	5.87%	14.82%	(8.95)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.	$761	$740	2.8%
Accounts Rec.	$1,306	$1,270	2.8%
Inventory	$708	$395	79.2%

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$514	$487	5.5%
Long-Term Debt	$306	$306	0%

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q3 2006	Q3 2005	Change
Cash From Ops.	$142	$140	1.4%
Capital Expenditures*	$52	$39	33.3%
Free Cash Flow	$90	$101	(10.9%)

*Includes Additions to capitalized software

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.