UPDATE: NCR 1Q Loss Widens On Pension Costs

NCR Corp.'s (NCR) first-quarter loss widened as the company continued to plow funds into its struggling pension program, even as the company posted a robust order backlog and reiterated its full-year forecast.

NCR, best known as a maker of automated teller machines and cash registers, struggled during the recession because its main bank and retail clients cut back on expenditures. But the Duluth, Ga., company, which also sells airport check-in machines and DVD rental kiosks under the Blockbuster Express brand, suggested some stress may be easing. It said it saw an 18% increase in orders over the year-ago period.

The company said on a conference call with analysts that both the financial and retail segments had double-digit order increases and it is still on track to deliver up to 10,000 DVD kiosks by year-end.

Shares of NCR were flat at $15.93 in after-hours trading, after closing up nearly 4%. The stock is up 43% so far this year.

NCR reported a loss of $19 million, or 12 cents a share, compared with a loss of $15 million, or 9 cents a share, a year earlier. Excluding pension and relocation charges, NCR posted first-quarter earnings of 15 cents a share. The company moved its headquarters from Ohio earlier this year.

Revenue edged up 2%, to $1.03 billion, with the Asia-Pacific-Japan region boasting 24% growth.

Analysts polled by Thomson Reuters most recently forecast a loss of 8 cents and $1.04 billion in revenue.

Chairman and Chief Executive Bill Nuti said on a conference call that regional and other bank business is picking up "modestly," a good sign as contracts to overhaul ATM fleets at a few large financial institutions come to a close. While retailers remain cautious, Nuti said the company is seeing "pockets" of activity.

Still, the company's pension plans are underfunded by nearly $1 billion. Even if it can improve its funding status, NCR will continue to book pension expenses related to the amortization of prior losses for years to come, Chief Financial Officer Robert Fishman said. The company expects to book a $215 million pension expense in 2010 and will contribute $110 million to the plans this year.

NCR said it will rebalance the assets in its pensions, shifting entirely to fixed income in the U.S. by the end of 2012. It will flip its current 60% equities, 40% fixed income allocation by the end of this year. The company will discuss asset allocations with local trustee boards for its international pensions.

NCR reiterated its full-year non-GAAP earnings forecast, saying it expects per-share earnings of $1.35 to $1.45. NCR also said it still expects revenue growth of 2% to 5% on a constant currency basis, but the company cut its full-year per-share earnings forecast by 2 cents, saying it now expects a range of 39 cents to 49 cents.

-By Melissa Korn, Dow Jones Newswires; 212-416-2271; melissa.korn@dowjones.com

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