While NCR Corp. (NYSE:NCR) faced significant headwinds from currency fluctuations, the company managed to increase third-quarter revenue in nearly every segment of the company on a constant currency basis. The company reported results Oct. 27. Investors should be pleased to see that free cash flow, though down slightly in the quarter, will meet guidance for the full year. 

NCR results: The raw numbers 


Q3 2015 Actuals

Q3 2014 Actuals

Growth (YOY)


$1.61 billion

$1.65 billion


Net Income From Continuing Operations

$168 million

$41 million


Adjusted EPS




Data source: NCR Corp.

What happened with NCR this quarter? 
Let's take a closer look at some of NCR's figures over the past three months:

  • While revenue was down 2%, NCR actually increased revenue by 5% on a constant currency basis. This shows just how much currency fluctuations affected the company in Q3.
  • NCR's lucrative hardware division brought in $616 million in sales, up 4% on a constant currency basis.
  • In the company's largest revenue segment, financial services, revenue was flat for the quarter, on a constant currency basis. Growth in the Americas, South Pacific, and Middle East Africa was offset by declines in China and Russia.
  • Retail solutions was a shining star in the quarter, as revenue hit $523 million, up 14% on a constant currency basis, driven by strong growth in Europe and North America.
  • The company's two smallest revenue divisions, hospitality and emerging industries, experienced 8% and 11% growth, respectively, on a constant currency basis. 
  • Free cash flow stands at $106 million, which is up $67 million from the year-ago quarter, when excluding $93 million in recoveries related a Fox River "environmental matter.". 

What management had to say
On NCR Corp.'s earnings call, CEO Bill Nuti said third-quarter results will allow it to meet its full-year goals:

We achieved these results in the face of a worsening currency environment, continued challenges in China and Russia, and more volatile capital markets. Despite these headwinds, we drove solid performance across our businesses, and remain on target to achieve our full year goals for earnings and free cash flow.

Nuti was particularly pleased with the third quarter's free cash flow. "Free cash flow, an area where our investors have been looking for continued progress, has been a great success year-to-date."  

Looking forward
In the fourth quarter, NCR expects revenue between $1.69 billion to $1.71 billion, compared to $1.77 billion in the fourth quarter of 2014. The company noted that currency fluctuations will continue to hurt revenue growth.  

For the full 2015 calendar year, NCR said it's decreasing its revenue guidance to 3% to 4% constant currency growth, based on "challenges in certain developing markets" and slower backlog product rollouts. That's down from the previous guidance of 5% to 7% growth. Guidance for non-GAAP diluted EPS estimates for the year are between $2.70 and $2.80, which is at the higher end of previous estimates.

And as Nuti noted in the earnings call, free cash flow is still estimated to fall between $350 million and $400 million for the year, unchanged from the prior guidance.