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NCR back in the black
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October 14, 1998: 1:34 p.m. ET
Expense reduction pushes computer firm's margins higher; outlook strong
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NEW YORK (CNNfn) - NCR Corp., in the midst of its transition from hardware to providing data warehousing services, said Wednesday its cost reduction measures helped push operations into the black in the third quarter.
The Dayton, Ohio-based computer company added it is on track to meet analysts' expectations in the fourth quarter and for 1999.
For the third quarter, net income totaled $25 million, or 25 cents a share, compared with a loss of $9 million, or 9 cents, in the year-ago period.
Revenue was flat at $1.55 billion.
But lower operating costs helped push gross margins higher. Profits as a percentage of revenue grew to 29.6 percent from 28.7 percent a year earlier. Margins were favorably affected by the recent decision to reduce retiree health care coverage, the company said.
During a conference call with analysts, NCR's new chief financial officer, David Bearman, said the company is now on track to meet fourth-quarter estimates in the range of 65 cents to 70 cents a share. For all of 1999, NCR is projected to earn between $2.05 and $2.10 a share, Bearman added.
The lion's share, about 90 percent, of those gains is expected to result from expense reduction, he said.
In the future, NCR officials told investors they will look toward acquisitions valued as much as $1 billion to further grow the company.
As of Sept. 30, NCR had cash and cash equivalents of $536 million.
For the latest nine months, net income totaled $73 million, or 71 cents a share, on revenue of $4.4 billion.
In early afternoon trading in new York, NCR shares (NCR) were off 7/8 at 30-5/16. 
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NCR
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