Back to top

Teradata (TDC) to Report Q4 Earnings: What's in the Cards?

Read MoreHide Full Article

Teradata Corp. (TDC - Free Report) is likely to beat estimates when it reports fourth-quarter 2017 results on Feb 8.

The company is expected to deliver a positive surprise this quarter, courtesy of the favorable combination of a Zacks Rank #3 (Hold) and an Earnings ESP of +1.49%.

This is because, per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Earnings Trend

Teradata has a mixed history of earnings surprise history. The company beat the Zacks Consensus Estimates in three of the last four quarters, with an average positive surprise of 7.33%.

Teradata Corporation Price and EPS Surprise

In third-quarter 2017, adjusted earnings of 29 cents per share beat the consensus mark by 8 cents but declined 58% year over year.

Net revenues of $526 million were down 4.7% on a year-over-year basis but beat the Zacks Consensus Estimate of $510.5 million. Top-line growth was affected by the company’s ongoing business transformation activity, under which large customers are shifting to subscription-based offerings.

For fourth-quarter 2017, Teradata expects revenues between $600 million and $620 million. The Zacks Consensus Estimate for revenues is currently pegged at $610.5 million.

Moreover, adjusted earnings are expected between 47 cents and 52 cents. The Zacks Consensus Estimate has been steady at 50 cents in the last 30 days.

Factors at Play

Teradata’s top-line growth is being affected by the ongoing business transformation. Also, restructuring-related costs, a sluggish spending environment in the domestic market and increasing competition will continue to weigh on its financials.

Nevertheless, Teradata is well positioned in the Enterprise Data Warehousing (EDW) solutions market, on the back of expanding portfolio. Moreover, the company’s strong partner base that includes the likes of Accenture, Capgemini, Deloitte, Cognizant, IBM, Wipro Limited is expected to drive growth.

The company’s focus on business consulting is likely to drive consulting revenues in the soon-to-be-reported quarter. Moreover, services gross margin is expected to improve on revenues from certain consulting engagements, which are likely to be recognized in the fourth quarter.

Stocks That Warrant a Look

Here are few stocks that you may want to consider as our model shows that they have the right combination of elements to deliver an earnings beat in their upcoming release.

NVIDIA (NVDA - Free Report) has an Earnings ESP of +4.13% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Broadridge Financial Solutions (BR - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2.

Activision Blizzard (ATVI - Free Report) has an Earnings ESP of +4.99% and a Zacks Rank #3.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

More from Zacks Analyst Blog

You May Like

Published in