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Why Teradata Stock Fell Friday

By Daniel Sparks – May 3, 2019 at 7:20PM

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Better-than-expected adjusted earnings per share weren't enough to impress.

What happened

Shares of data analytics and management specialist Teradata (TDC -0.64%) took a hit on Friday, declining as much as 10.8%. The stock finished the trading day down 10%.

The stock's decline followed Teradata's first-quarter update, which included better-than-expected non-GAAP earnings per share but missed expectations for first-quarter revenue. In addition, guidance for second-quarter non-GAAP earnings per share was lower than expected.

A chalkboard sketch of a chart showing a stock price falling.

Image source: Getty Images.

So what

First-quarter revenue fell from $506 million in the year-ago quarter to $468 million in the first quarter of 2019. Analysts, on average, expected revenue of about $488 million. Recurring revenue, however, rose 10% year over year, or 13% in constant currency.

Non-GAAP earnings per share for the quarter were $0.22, up from $0.19 in the first quarter of 2018. This was above analysts' consensus forecast for $0.20.

"In the first quarter, Teradata continued its strong momentum," explained Teradata CEO Oliver Ratzesberger, "backed by increasing demand for Teradata Vantage, our game-changing platform that is helping the world's leading enterprises get the answers they need for their toughest analytic challenges."

Now what

Teradata guided for non-GAAP revenue in its second quarter to be between $0.28 and $0.30, missing analysts' average estimate for $0.34. For the full year, Teradata said it expects recurring revenue to rise 10% to 11% and non-GAAP earnings per share to be between $1.45 to $1.55.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Teradata. The Motley Fool has a disclosure policy.

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