What happened
Shares of NCR Corporation (VYX 1.41%) crashed hard on Wednesday. The provider of ATM kiosks, digital banking services, point-of-sale systems, and restaurant management tools published its first-quarter results on Tuesday evening. Investors were not impressed by this report.
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So what
NCR's first-quarter sales rose 21% year over year, landing at $1.86 billion. Unfortunately, your average analyst expected a stronger surge with top-line revenue near $1.93 billion. On the bottom line, adjusted earnings fell 35% to $0.33 per diluted share. Here, the Street consensus had pointed to $0.63 per share.
Furthermore, NCR's disappointing results are sticking around for a while. Management lowered the midpoint of its full-year earnings guidance from $3.40 to $2.95 per share.
Now what
CEO Michael Hayford said that demand for NCR's products and services was strong, but not robust enough to overcome several headwinds from the global economy. The company faced direct challenges from the omicron variant, a global wave of extreme inflation readings, and the war in Ukraine.
That being said, NCR stands at a crossroads. The company is coming back from a long stretch of stalled revenue growth and inconsistent free cash flows, and this business update took the wind out of the sails that were starting to fill up at the end of 2021. The board and management are in the midst of a strategic review, which could change the 138-year-old company's business and investor value dramatically.
So NCR's future looks unpredictable today, but the uncertainty is also fully baked into the stock. NCR shares are trading at just 9.8 times the adjusted full-year earnings projections and six times trailing cash flows today. Value investors should see a lot to like in NCR at these low prices.
