What's In Store For Teradata (TDC) This Earnings Season?

Teradata Corporation (NYSE:TDC) is set to report first-quarter 2017 results on Apr 27. Last quarter, the company posted an 11.76% positive earnings surprise, with an average positive earnings surprise of 18.49%.

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. Moreover, partnerships and acquisitions have been the key growth drivers for Teradata.

Furthermore, Teradata is bringing out a cloud version of its offerings to provide more flexible options to its clients. In 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 (NYSE:ORCL) , IBM (NYSE:IBM) Corporation, Microsoft (NASDAQ:MSFT), Dell and others is a concern.

We note that Teradata has underperformed the Zacks categorized Computer Storage Devices industry in the last one year. The company’s shares have increased 19.34% compared with the industry’s gain of 64.67% during the period.

Revenues for the first quarter of 2017 are expected to be approximately $500 million. Non-GAAP earnings per share are expected in a range of $0.25–$0.30.

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 19 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 #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

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

Stocks to Consider

Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:

Teradyne, Inc. (NYSE:TER) has an Earnings ESP of +2.63% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Seagate Technology plc (NASDAQ:STX) has an Earnings ESP of +3.77% and a Zacks Rank #2.

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