Reuters: Global Markets: NCR shares fall on concern about bribery, sanctions allegations

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NCR shares fall on concern about bribery, sanctions allegations Aug 14th 2012, 15:36 Tue Aug 14, 2012 11:36am EDT (Reuters) - Shares in NCR Corp (NCR.N) slid more than 10 percent on Tuesday after two Wall Street Journal reports that the ATM maker may have violated both anti-bribery laws and U.S. sanctions against Syria prompted a brokerage to downgrade the stock. Wedbush Securities Inc downgraded NCR Corp (NCR.N) to "neutral" from "outperform", warning an investigation may have a significant effect on the firm. "Pending more visibility into the impact of the issues raised by the Wall Street Journal online, we believe (earnings) growth is at risk," the brokerage said in a note. NCR shares did not react to the WSJ reports on Monday but fell to $22.70 on the New York Stock Exchange on Tuesday morning. The stock touched a four-year high earlier this month. The newspaper said NCR was investigating anonymous allegations that employees in China and the Middle East may have violated a U.S. anti-bribery law. (r.reuters.com/kup99s) In a separate report, the paper said the company had also been tipped off by an anonymous source that it may have violated U.S. sanctions on Syria. (r.reuters.com/xeg99s) Duluth, Georgia-based NCR was not immediately available for comment on the reports. Wedbush said investigation costs and a fine under the U.S. Foreign Corrupt Practices Act (FCPA) could cost NCR millions or tens of millions of dollars. "Much of NCR's share gains over the last two years have come in emerging markets, which means growth may be at risk if an FCPA investigation restricts current business practices," Wedbush analyst Gil Luria said in a note to clients. Revenue of $200 million to $300 million from NCR's Chinese business might be at risk if the allegations there were proven, he said. Wedbush said a two-year FCPA investigation has cost Diebold Inc (DBD.N), a rival to NCR, an estimated $100 million from its Russian business and may end in a significant fine. The brokerage cut its price target on NCR shares to $23 from $33 and said the issues affecting NCR and Diebold could drive gains for rivals such as China-based GRG, South Korea's Hyosung or Hitachi's ATM business. (Reporting by Tej Sapru in Bangalore; Writing by Rodney Joyce) Link this Share this Digg this Email Reprints

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