Shares of NCR (NYSE:NCR) jumped 14% today after the company reported second-quarter earnings. Both the top and bottom lines came in ahead of consensus estimates.
Revenue in the second quarter was $1.48 billion, slightly ahead of the $1.43 billion in sales that Wall Street was expecting. Adjusted earnings per share came in at $0.27, also topping the $0.21 per share in adjusted profits that analysts were modeling for. The coronavirus pandemic continues to hurt the payment technology company's business, but the impacts were largely within expectations.
"In the second quarter, we further advanced our strategy, including strong recurring revenue growth and free cash flow generation, as we executed at a high level in an operating environment that was negatively impacted by COVID-19," CEO Michael Hayford said in a statement. "When the pandemic began, we focused on three priorities, protect our employees, help our customers and protect the company."
NCR had previously withdrawn its full-year guidance due to ongoing macroeconomic uncertainty, particularly since it has customers in the hospitality and retail sectors. NCR is focusing its efforts on its shift to recurring revenue.
"While it is difficult to project how deep the pandemic will be and how long it will last, we do expect it will negatively impact our business for the remainder of 2020 and into 2021," the company wrote. "We expect our Hospitality and Retail segments to be the most impacted by the COVID-19 pandemic, but do expect our Banking segment will also experience negative impacts."
J.P. Morgan and Morgan Stanley both reiterated neutral (or equivalent) ratings following the release. The former firm lowered its price target from $22 to $21, while the latter increased its valuation estimate from $16 to $18 per share.