DVD kiosk operator NCR reports lower Q3

PHYSICAL: Net income dropped 79%, revenue down 18%

By Susanne Ault -- Video Business, 10/23/2009

OCT. 23 | PHYSICAL: DVD vending operator NCR reported weakened third-quarter earnings, mostly blaming this year’s difficult economic conditions.

NCR, which operates Blockbuster Express-branded kiosks, posted $17 million in net income for the three months ended Sept. 30. That marks a 79% drop from what the company recorded during the comparable 2008 period.

Total revenue fell 18% to $1.14 billion.

The company is optimistic about its growing DVD rental machine business and is on track to install 2,500 machines by year-end. In August, NCR slotted Blockbuster Express kiosks in Big Y grocery stores throughout Massachusetts and Connecticut. Additionally, machines are being installed throughout the Publix grocery chain, including such locations as Georgia and South Carolina.

Yet, NCR’s overall business, which also is involved in a wide range of automated services such as ATMs and airline check-in kiosks, has been marred by this year’s recession.

“In the third quarter, financial services and especially retail customer investments were negatively impacted by the global economic downturn in most geographies,” said Bill Nuti, chairman/CEO at NCR. “The willingness to invest in the second quarter of 2009, which helped NCR deliver solid results in that quarter, did not spill over into the third quarter. While we will take additional cost reduction actions to right-size our enterprise, our early view is that 2010 will be a better year for NCR and for our customers, and should position NCR for moderate growth and margin expansion.”

The company expects full-year 2009 revenue to be in the range of 14% to 16% lower, which encompasses current currency exchange rates.