What happened

Shares of NCR Corporation (NYSE:NCR) were down 9.6% as of 3:00 p.m. EST after the payment and banking solutions company announced solid fourth-quarter 2017 results, but followed with disappointing forward guidance. More specifically, NCR's quarterly revenue declined 1.1% year over year, to $1.78 billion, which translated to adjusted earnings of $0.92 per share -- both figures near the high end of guidance provided last quarter.

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So what

"Our fourth-quarter results were consistent with our guidance and reflect continued momentum in strategic areas such as cloud and Services margin expansion," added NCR Chairman and CEO Bill Nuti. "While ATM revenue was lower than expected in 2017, growth in unattached software, cloud, and recurring revenues, allowed us to build a stronger foundation going into 2018."

NCR's software revenue climbed 1% year over year during the quarter, to $508 million, led by a 6% increase in cloud revenue. Still, that wasn't enough to offset a 7% decline in hardware revenue, to $655 million, hurt primarily by a 21% decline in ATM revenue.

Now what

For the first quarter of 2018, however, NCR expects revenue to change in the range of down 1% to up 2%, with adjusted earnings per share of $0.41 to $0.47. Both figures were below investors' expectations for first-quarter earnings of $0.56 per share on revenue growth of 2.6%.

In addition, NCR says it's evaluating programs to drive improved margins in both its hardware and services segments, and expects to achieve $150 million in annual-run-rate savings by 2020. In the meantime, NCR anticipates incurring related pre-tax charges of $200 million to $250 million over the next two years, with around $100 million to $150 million to be recognized in 2018.

As such, for the full year of 2018, NCR expects modest revenue growth in the range of 0% to 3% -- or roughly in line with expectations -- GAAP earnings per share of $2.08 to $2.48, and adjusted (non-GAAP) earnings per share of $3.30 to $3.45.

All told, NCR appears to be taking the right steps to drive sustained, profitable growth over the long term. But it's obvious our market is disappointed in the costs of those steps and its light near-term outlook, so it's no surprise to see the stock pulling back in response today.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends NCR. The Motley Fool has a disclosure policy.