Many companies known only by their initials are giants in their respective industries, and for NCR (NYSE:NCR), its roots as National Cash Register live on in its corporate name. Yet NCR has gone far beyond its initial slate of product offerings, participating in the innovation in the financial and business services industry to come up with a host of new products designed to boost productivity and serve a wider client base.

Coming into Tuesday's first-quarter financial report, NCR investors were prepared for only minimal gains in the company's key business metrics. NCR performed somewhat better than that, and the popularity of its automated teller machines continues to pay off for the company in helping to bolster overall revenue gains.

Child sitting on a couch in front of an NCR ATM.

Image source: NCR.

NCR is a cash machine

NCR's first-quarter results showed the same slow but steady progress that the company has managed in previous periods. Revenue climbed 1% to $1.54 billion, which was better than the flat performance that most of those following the stock had anticipated. Adjusted net income from continuing operations fell to $73 million, down $12 million from year-ago levels, but the resulting adjusted earnings of $0.48 per share still matched the consensus forecast among investors.

NCR's business segments had to deal with some unexpected headwinds. The software division managed to boost segment revenue by 2%, but services sales fell 3% due largely to the strength of the U.S. dollar. However, the hardware division showed the strongest performance, with segment sales climbing 6% on a 21% jump in revenue from ATMs. Declines in point-of-sale equipment and self-checkout machinery ate into those hardware gains, but not by enough to wipe out the impressive performance.

From an industry standpoint, banking brought NCR the greatest success. Again, ATM demand bolstered the banking segment, especially in North America. Retail revenue was down 2% on a tough comparison against the year-earlier quarter, while hospitality revenue dropped 5% as lower hardware sales wiped out gains from cloud-related revenue sources.

Gross margin deterioration kept weighing down NCR, but the impact wasn't as large as it's been in the past. Gross margin figures fell just seven-tenths of a percentage point to 27.7% on an adjusted basis, as the banking unit helped to offset tough results elsewhere.

What's ahead for NCR?

CEO Michael Hayford was happy to see the results. "Our performance included a return to growth and a strong quarter in our banking segment," Hayford said, and "we continue to improve execution and are making progress on the targeted investments needed to accelerate our mix shift toward higher margin software, services, and recurring revenues." The CEO was pleased with how NCR started off 2019 on a strong footing.

NCR remains hopeful for the future. Hayford said that the company is on track to achieve its full-year targets, and as more sustainable sources of revenue become a bigger part of the overall business, NCR expects to gain more traction and lay a foundation on which to build further growth initiatives.

Even so, NCR didn't make any major changes to its 2019 guidance. The equipment manufacturer believes that it will still have full-year revenue growth of 1% to 2%, and adjusted earnings will end up in a range between $2.75 and $2.85 per share.

NCR investors seemed happy with the results, and the stock climbed 2% at midday on Wednesday following the Tuesday night announcement. With several opportunities to pursue further growth, shareholders will have to hope that NCR can set the right priorities and then execute well on the programs that it identifies as its most promising pathways to long-term success.