Why Teradata Corporation Stock Popped Today

By MarketsFool.com

What happened

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Shares of Teradata Corporation (NYSE: TDC) were up 9.6% as of 12:15 p.m. EST Thursday after the data warehouse platform, software, and services specialist announced stronger-than-expected fourth-quarter 2016 earnings.

So what

Quarterly revenue declined 13% year over year (12% at constant currency), to $626 million. That translated to adjusted net income of $89 million, or $0.67 per diluted share, down from $101 million, or $0.75 per share in last year's fourth quarter. To be fair, Teradata's fourth-quarter of 2015 also included $39 million of revenue from its marketing applications business, which was sold on July 1, 2016.

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Analysts, on average, expected Teradata to report slightly higher revenue of $628.4 million but lower adjusted earnings of $0.60 per share.

Image source: Teradata.

Now what

As CEO Victor Lund said:

Teradata also noted that because it is now offering subscription license programs for its core analytic offerings as part of its ongoing business transformation, which was originally outlineda little over a year ago,"it is difficult to estimate how much full-year 2017 reported revenue could be impacted by the change." As such, it isn't providing full-year 2017 guidance until it has more clarity.

In the meantime, Teradata anticipates first-quarter 2017 revenue to be roughly $500 million, which should result in adjusted earnings per share of $0.25 to $0.30. Analysts' consensus estimates called for Q1 earnings well within that range, at $0.32 per share, on lower revenue of $486.5 million.

All things considered, this was a solid quarter for Teradata as it continues to implement transformation. Given Teradata's relative bottom-line outperformance in Q4 and strong guidance, it's no surprise to see shares trading higher today.

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Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Teradata. The Motley Fool has a disclosure policy.