NCR CORP. $34 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) is a leading maker of automated teller machines (ATMs), cash registers and bar code scanners. It also provides customers with maintenance services and supplies such as paper and ink.

NCR’s fastest growing business is its Teradata division, which helps businesses capture and analyze data such as customer buying habits. Identifying trends helps Teradata clients improve customer satisfaction, and expand sales. Teradata accounts for 25% of NCR’s revenue, but 60% of its profit.

Thanks to an 11% rise in revenue at Teradata, NCR’s overall revenue in the three months ended June 30, 2006 rose 4.1%, to $1.53 billion from $1.47 billion a year earlier. Net income fell 37.3%, to $0.42 a share (total $78 million) from $0.67 a share ($127 million).

However, if you disregard a tax refund and other one-time items, NCR earned $0.37 a share in the yearearlier quarter, which means per-share income actually rose 13.5%. The benefits of a restructuring plan also contributed to the improved earnings.

NCR spends roughly 4% of its revenue of $32 a share on research, which makes it seem less profitable than it really is. This spending should pay off in the next few years as banks replace older ATMs with new models that speed up the check-clearing process. Demand from retailers for self-serve checkout systems is also rising strongly.

The company has $747 million ($4.15 a share) in cash, and just $305 million in long-term debt (14% of stockholders’ equity). NCR is using its cash to buy back stock. It spent $98 million on buybacks in the most recent quarter, and is still authorized to repurchase a further $353 million.

The stock fell to $8.50 in 2003, but climbed to a new peak of $44 in April 2006. It now trades at 18.3 times its likely 2006 profit of $1.86 a share.

NCR is a buy.