Technology and solutions provider NCR Corp. (NCR) recently entered into a multiyear agreement, with Old National Bank (ONB), a $7.8 billion financial services organization situated in Indiana. The agreement enables Old National Bank to use NCR’s Web Hosting Services and APTRA Online Banking solution for extending its e-commerce platform.

NCR will provide Old National Bank with 99.9% system support, as Old National Bank expects its online banking customers to double by next year. NCR did not disclose the financial details of the transaction, but we believe that this will generate substantial recurring revenue for the company over the next few years.

Apart from growing its business in the financial services market, NCR is diversifying its business into other sectors.

Healthcare represents a large market opportunity. Consequently, NCR entered the market with the acquisition of Galvanon, Inc., a privately-held company and leading provider of self-service solutions.

The acquisition also helped NCR secure numerous customer wins for MediKiosk, a self-service patient check-in solution provided by Galvanon. This solution enables each clinic to streamline the patient registration process, shorten wait times and reduce administrative costs, thus helping to minimize errors. Recently, with the introduction of the NCR MediKiosk, NCR extended this capability into the international healthcare market.

The company is restructuring its business model and expanding its service offerings and business needs. However, these efforts are not reflected in its first quarter 2010 results, as the company reported an adjusted net loss per share of $0.10 on revenues that moved up marginally by 2% on a year-over-year basis. Revenue in America and Asia Pacific & Japan (APJ) improved, but dipped 6.0% year-over-year in the Europe Middle East Africa (EMEA) region, driven by weakness at customers belonging to the financial services sector.

While we are encouraged by the company’s market leadership, successful acquisitions, new product introductions and new business ventures, we believe that near-term visibility is limited. We expect NCR’s robust business model and restructuring initiatives to revive growth across all the segments in the medium to long term.

We have a neutral rating on NCR shares.

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