Teradata 1Q profit falls with lower gross margin

Database manager Teradata Corp. said Thursday that its first-quarter profit declined as its gross margin fell on lower product volume in the Americas region and expenses rose.

For the quarter that ended March 31, Teradata earned $42 million, or 23 cents per share, compared with $43 million, or 24 cents per share, in the year-ago quarter.

Teradata's revenue rose to $375 million from $367 million.

While the company's Europe, Middle East and Africa revenue rose, its Americas region revenue declined 2.3 percent. Also, the gross margin in that region fell to 54.3 percent from 59.5 percent, due mostly to lower product volume and revenue mix, plus an unfavorable deal mix.

The company's overall gross margin declined to 51.7 percent from 53.4 percent in the year-ago quarter.

Teradata's selling, general and administrative expenses rose 17.2 percent to $116 million. The company's research and development expenses declined 7.4 percent to $25 million.

"While we are disappointed with our start to the year, primarily due to lengthening sales cycles in the United States, the fundamentals of our business remain solid and we are maintaining our guidance for 2008," said Chief Executive and President Mike Koehler.

The company still expects 2008 earnings of $1.35 to $1.45 per share on revenue growth of 5 to 8 percent. Based on 2007 revenue of $1.7 billion, this implies an expectation for about $1.79 billion to $1.84 billion in 2008 revenue.

Teradata shares rose 88 cents, or 3.8 percent, to $23.95 in early afternoon trading.