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Teradata (TDC) Q2 Earnings: What to Expect This Time?

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Teradata Corp. (TDC - Free Report) is set to report second-quarter 2016 results on Aug 2. Last quarter, the company posted a 19.35% positive earnings surprise.

Let’s see how things are shaping up for this announcement.

Factors to Consider

Teradata is a leading provider of data warehousing and enterprise analytics. The company is well positioned to benefit from robust growth in the data warehousing market based on a strong product portfolio, customer wins, strategic partnerships and accretive acquisitions. Teradata’s international expansion, improved traction from sales force expansion, new products and alliances, market share gains and a growing database analytics market should be another set of positives for the company.

The company plans to exit its Marketing Application business to build up its capabilities in the growing Data and Analytics business, which will likely impact its profits in the near term. Simultaneously, the company is also working to optimize its cost structure and streamline its operations, which are expected to benefit the company’s financials in this year itself.

This apart, increasing competition from peers like Oracle (ORCL - Free Report) and IBM Corp. (IBM - Free Report) remain concerns.

Earnings Whispers

Our proven model does not conclusively show that Teradata is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: Teradata currently has an Earnings ESP of +5.88% ESP as the Most Accurate estimate of 51 cents is lower than the Zacks Consensus Estimate of 54 cents.

Zacks Rank: Teradata currently has a Zacks Rank #4 (Sell).

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

TERADATA CORP Price and EPS Surprise

TERADATA CORP Price and EPS Surprise | TERADATA CORP Quote

Stock to Consider

Here is a stock worth considering that, as per our model, has the right combination of elements to post an earnings beat this quarter:

LATAM Airlines Group S.A. has an earnings ESP of +166.67% and a Zacks Rank #2.

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