NEW YORK (AP) — Allegations that NCR employees have violated sanctions against Syria and a federal corruption law have clobbered the company's stock. The business-technology company's shares sank 10 percent in Tuesday trading.
The Wall Street Journal reported late Monday that an anonymous tipster told the company its employees in China and the Middle East may have violated a U.S. law, the Foreign Corrupt Practices Act. That followed another report in the Journal that NCR is operating a subsidiary in Syria that has worked with two blacklisted Syrian banks. That would violate the Obama Administration's sanctions against the Syrian government.
NCR Corp., based in Duluth, Ga., makes automated-teller machines, among a variety of other business products. A spokesman for the company didn't immediately return a call requesting comment.
The allegations led analyst Gil Luria of Wedbush Securities to cut his rating on the company. Luria dropped NCR to "Neutral" from "Outperform" on Tuesday.
In a note, Luria said NCR's earnings growth may take a hit. If the allegations are true, he estimates NCR's $200 million to $300 million of revenue in China could be at risk. Fines could run from "single millions to tens of millions," he said. Its growth in emerging markets, a strength for NCR over the last two years, could also suffer.
Luria compared NCR to Diebold Inc., another maker of automated-teller machines under investigation for violating the Foreign Corrupt Practices Act. He estimated Diebold may have lost as much as $100 million of revenue in Russia as a result.
NCR's stock dropped $2.65 to $22.47 in Tuesday trading. Luria lowered his price target on the stock from $33 to $23.