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Teradata (TDC) Down 4.2% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Teradata Corporation (TDC - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Teradata Q4 Earnings Beat Estimates, Revenues In Line
Teradata Corporation reported fourth-quarter 2016 results wherein adjusted earnings per share of $0.57 easily topped the Zacks Consensus Estimate of $0.51. However, on a year-over-year basis, it declined 9.5%.
The company reported non-GAAP earnings of $0.67 in the quarter compared with $0.75 in the year-ago quarter.
Revenue Details
Revenues of $626 million came in line with the Zacks Consensus Estimate. However, on a year-over- year basis, it plunged 13% mainly due to the company’s ongoing business transformation activity under which its large customers have begun shifting to subscription pricing offerings.
Products revenues decreased 19% year over year to $259 million. Services revenues fell 8% on a year-over-year basis to $367 million. Revenues from Americas Data and Analytics declined 10% year over year while that from International Data and Analytics dropped 5% from the prior-year quarter.
Margins
Non-GAAP gross margin contracted 130 basis points (bps) from the year-ago quarter to 51.3% mainly due to lower volume.
The company reported non-GAAP operating income of $126 million, down from $143 million reported in the prior-year quarter. Non-GAAP operating margin shrunk 90 bps to 20.1%.
Balance Sheet
Teradata exited the quarter with $974 million in cash and cash equivalents compared with $988 million at the end of the previous quarter. Teradata had long-term debt of $538 million at the end of the fourth quarter compared with $545 million at the end of third-quarter 2016.
In 2016, Teradata generated cash flow from operations of $446 million compared with $401 million in 2015. Free cash flow generated was $328 million compared with $281 million last year.
Teradata repurchased $82 million worth of shares in the fiscal with $500 million still left under the repurchase authorisation as of Dec 31, 2016.
Guidance
Revenues for the first quarter of 2017 are expected to be approximately $500 million. Non-GAAP earnings per share are expected in a range of $0.25 – $0.30.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Teradata's stock has a poor Growth Score of 'F', while its Momentum is doing a bit better with 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We are expecting a below average return from the stock in the next few months.
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Teradata (TDC) Down 4.2% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Teradata Corporation (TDC - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Teradata Q4 Earnings Beat Estimates, Revenues In Line
Teradata Corporation reported fourth-quarter 2016 results wherein adjusted earnings per share of $0.57 easily topped the Zacks Consensus Estimate of $0.51. However, on a year-over-year basis, it declined 9.5%.
The company reported non-GAAP earnings of $0.67 in the quarter compared with $0.75 in the year-ago quarter.
Revenue Details
Revenues of $626 million came in line with the Zacks Consensus Estimate. However, on a year-over- year basis, it plunged 13% mainly due to the company’s ongoing business transformation activity under which its large customers have begun shifting to subscription pricing offerings.
Products revenues decreased 19% year over year to $259 million. Services revenues fell 8% on a year-over-year basis to $367 million. Revenues from Americas Data and Analytics declined 10% year over year while that from International Data and Analytics dropped 5% from the prior-year quarter.
Margins
Non-GAAP gross margin contracted 130 basis points (bps) from the year-ago quarter to 51.3% mainly due to lower volume.
The company reported non-GAAP operating income of $126 million, down from $143 million reported in the prior-year quarter. Non-GAAP operating margin shrunk 90 bps to 20.1%.
Balance Sheet
Teradata exited the quarter with $974 million in cash and cash equivalents compared with $988 million at the end of the previous quarter. Teradata had long-term debt of $538 million at the end of the fourth quarter compared with $545 million at the end of third-quarter 2016.
In 2016, Teradata generated cash flow from operations of $446 million compared with $401 million in 2015. Free cash flow generated was $328 million compared with $281 million last year.
Teradata repurchased $82 million worth of shares in the fiscal with $500 million still left under the repurchase authorisation as of Dec 31, 2016.
Guidance
Revenues for the first quarter of 2017 are expected to be approximately $500 million. Non-GAAP earnings per share are expected in a range of $0.25 – $0.30.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Teradata Corporation Price and Consensus
Teradata Corporation Price and Consensus | Teradata Corporation Quote
VGM Scores
At this time, Teradata's stock has a poor Growth Score of 'F', while its Momentum is doing a bit better with 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We are expecting a below average return from the stock in the next few months.