The 10-second takeaway
For the quarter ended March 31 (Q1), Teradata missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped significantly.
Margins shrank across the board.
Teradata logged revenue of $587.0 million. The 18 analysts polled by S&P Capital IQ expected revenue of $609.7 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.43. The 21 earnings estimates compiled by S&P Capital IQ anticipated $0.53 per share. Non-GAAP EPS of $0.43 for Q1 were 28% lower than the prior-year quarter's $0.60 per share. GAAP EPS of $0.35 for Q1 were 34% lower than the prior-year quarter's $0.53 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 52.0%, 360 basis points worse than the prior-year quarter. Operating margin was 12.8%, 840 basis points worse than the prior-year quarter. Net margin was 10.1%, 470 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $670.7 million. On the bottom line, the average EPS estimate is $0.72.
Next year's average estimate for revenue is $2.81 billion. The average EPS estimate is $3.03.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 703 members out of 733 rating the stock outperform, and 30 members rating it underperform. Among 204 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 199 give Teradata a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Teradata is outperform, with an average price target of $75.26.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Teradata. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.