) fourth-quarter non-GAAP earnings per share increased 19.7% from
the year-ago quarter to 79 cents. Including stock based
compensation of 6 cents; the company reported earnings of 73
cents per share, ahead of the Zacks Consensus Estimate of 70
cents per share.
Revenues increased 10% from the year-ago quarter (up 11% on
constant currency) to $740 million and beat the Zacks Consensus
Estimate of $724 million. The beat was primarily driven by 9%
year-over-year growth in product revenue (10% on a constant
currency basis), 6% year-over-year growth (7% on a constant
currency basis) in maintenance services revenue and 14% (15% on a
constant currency basis) year-over-year upside in consulting
Region wise, Teradata achieved strong growth from the Europe,
the Middle East and Africa (EMEA) in the quarter. Revenues from
the region increased 21% year over year (24% on a constant
currency basis) to $176 million. Revenues from the
Asia-Pacific/Japan region increased 2% year over year (2% on a
constant currency basis) to $115 million. Revenues from the
Americas region grew 8% year over year (9% on a constant currency
basis) to $449 million.
Non-GAAP gross profit (excluding stock-based compensation
expense and other one-time items) increased 9% year over year to
$418 million. Gross margin contracted 10 basis points from the
year-ago quarter to 56.4% in the quarter, primarily due to
unfavorable business mix. Stock-based compensation did not
materially impact gross profits in the quarter.
Operating expenses increased 7.9% year over year to $260
million. The upside was attributable to a 13.5% increase in
selling, general and administrative expense (SG&A), which
fully offset the 10.7% decrease in Research and Development
Despite incurring higher operating expenses, Teradata
witnessed a 14% rise in non-GAAP operating income (excluding
stock-based compensation expense and other one-time items) to
$177 million in the quarter. Operating margin stood at 23.9%, up
100 bps from the year-ago quarter, based on strong revenue and
favorable product margins in the quarter. Accounting for the
stock-based compensation, operating income came in at $165
Teradata's fourth-quarter non-GAAP net income (excluding
stock-based compensation expense and other one-time items) was
$135.0 million or 79 cents per share compared with $113.0 million
or 66 cents in the year-ago period. Including stock-based
compensation, net income came to $125.0 million or 73 cents
compared with $107.0 million or 62 cents in the year-ago
Teradata exited the quarter with $729.0 million in cash versus
$909.0 million in the previous quarter. As of Dec 31, 2012,
Teradata had total long-term debt of $274.0 million compared with
$278.0 million as of Sep 30, 2012.
Teradata generated cash flow from operations of $124.0 million
in the quarter compared with $107.0 million in the previous
quarter. Free cash flow generated in the quarter was $85.0
Teradata provided guidance for fiscal 2013. The company
expects its revenues to increase in the range of 6%-10% on a
year-over-year basis. Moreover, the company expects earnings per
share in the range of $3.05-$3.20. The Zacks Consensus Estimate
for fiscal 2013 is pegged at $3.02, below the guided range.
We believe that new customer wins and strengthening
relationships with large vendors, such as
), will be the primary revenue drivers over the long term. We
believe that Teradata will continue to benefit from its
international expansion, improved traction from sales force
expansion, new products and alliances, market share gains and a
growing database analytics market.
However, increased investment in sales, and an increase in the
number of competing products from big names, such as
International Business Machines
), are resulting in continued pricing pressure that will likely
limit margin expansion going forward.
Currently, Teradata has a Zacks Rank #3 (Hold).
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