What to Expect from Teradata (TDC) this Earnings Season?

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Teradata Corporation (TDC) is set to report fourth-quarter 2016 results on Feb 9. Last quarter, the company posted a 15.38% positive earnings surprise. The company recorded an average positive earnings surprise of 14.78% in the trailing four quarters.

We note that Teradata has underperformed the Zacks categorized Computer Storage Devices industry in the last one year. The company's shares have increased 32.35% compared with the industry's gain of 66.40% during the period.

Let's see how things are shaping up for this announcement.

Factors at Play

Teradata is well positioned in the data warehousing and enterprise analytics market. The company offers a strong product portfolio and partnerships and acquisitions have been the key growth drivers for Teradata. In line with its growth strategy, the company divested its Marketing Application business to focus more on its Data and Analytics business

Moreover, Teradata is also bringing out a cloud version of its offerings to provide more flexible options to its clients. Over the long run, the company is expected to benefit from its transition to a subscription-based revenue model.

However, restructuring related costs and a sluggish spending environment in the domestic market will continue to weigh on its financials. This apart, increasing competition from the likes of Oracle ORCL IBM Corporation IBM , Microsoft MSFT , Dell and others is a concern.

For the fourth quarter, revenues are expected to be in a range of $620 million to $640 million. Non GAAP earnings per share are expected in the 57 cents - 62 cents bracket.

Teradata Corporation Price and EPS Surprise

Teradata Corporation Price and EPS Surprise | Teradata Corporation Quote

Earnings Whispers

Our proven model does not conclusively show that Teradata is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP: Earnings ESP for Teradata is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 51 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Teradata has a Zacks Rank #5 (Strong Sell). We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions.

You can see the complete list of today's Zacks #1 Rank stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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