The Associated Press

DAYTON - NCR Corp. shares fell 7 percent Thursday after the company reported better-than-expected second-quarter results but released an outlook for the rest of the year that disappointed many analysts.

The computer services company predicted third-quarter earnings of 15 to 20 cents a share and 2004 earnings of $1.20 to $1.25, saying $20 million in severance costs likely would reduce its yearly earnings by 15 cents a share.

Analysts surveyed by Thomson First Call had expected third-quarter earnings of 31 cents a share and 2004 earnings of $1.45.

NCR shares closed down $3.54, or 7.2 percent, at $45.46 on the New York Stock Exchange.

For the second quarter, NCR said it earned $122 million, or $1.27 a share, on revenue of $1.45 billion. That compared with a loss of $13 million, or 14 cents a share, on revenue of $1.4 billion a year ago.

The results included an $85 million tax benefit from the resolution of prior-year tax audits.

The company also noted that in the second quarter of 2003, it took a $35 million charge to help with the cleanup of the Fox River in Wisconsin, where it had owned a plant until 1978.

"NCR delivered a strong second quarter, with higher-than-expected revenues ... and further improvements in the cost and expense lines across the company," said Mark Hurd, president and CEO.