NCR hit by data warehouse spending slowdown

NCR Corp. Monday joined the list of technology vendors issuing warnings about lower-than-expected financial results for the second quarter, disclosing that its profits will likely be almost 40 percent less than earlier projections by analysts because of deferred purchases by some users.

The Dayton, Ohio-based computer and software vendor also announced that it has given responsibility for its retail and financial industry business units and its customer services operations to Howard Lance, who was named one of two presidents at NCR. Mark Hurd, the head of the company's data warehousing business, also was given the title of president.

The Teradata data warehousing unit was cited as the chief culprit for NCR's weak performance in the second quarter. The company said concern about the sluggish economy prompted Teradata users to postpone more than US$60 million worth of scheduled technology upgrades during the quarter, with many of the deferrals coming in the final days of the period.

The postponements were especially prevalent in the telecommunications and retail industries, according to NCR, which said data warehousing revenue would increase by only about 2 percent on a year-to-year basis. The company added that profits in its high-availability customer services unit will also be lower than planned due to business shortfalls in markets such as telecommunications.

Total profits are now expected to amount to about $35 million in the second quarter, compared with earlier expectations in the $55 million range. NCR said second-quarter revenue will total about $1.5 billion, up 3 percent from the year-earlier figure. Sales at its retail store automation and financial self-service units should increase 7 percent on an aggregate basis, the company said.

The final results for the second quarter are scheduled to be announced on July 17. NCR said it's currently evaluating the business outlook for the second half of the year and will provide more detailed guidance on its expectations when the second-quarter numbers are released.

In addition to being given the company president title along with Hurd, Lance was named chief operating officer of NCR's retail and financial group. He takes over that job from Bill Amelio, a former executive vice president who left the company earlier this year. Lance worked for the past 17 years at St. Louis-based manufacturing conglomerate Emerson Electric Co.

Hurd previously was an executive vice president at NCR, according to a company spokesman, who said the new co-president titles were meant to reflect the importance of the jobs being done by Hurd and Lance. Both executives report to Lars Nyberg, NCR's chairman and CEO, and are part of the company's four-person executive committee.

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