Teradata Soars on Strong Earnings and Demand for Cloud

Teradata swung to a fourth-quarter profit, benefiting from corporate demand for enterprise software. Investors have taken strong notice.
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Teradata  (TDC) - Get Report shares soared Friday after the data-analytics company reported stronger-than-expected fourth-quarter earnings, benefiting from corporate demand for enterprise software and cloud services.

Investors have taken strong notice. The San Diego company’s stock recently traded at $35.62, up 32%. On Friday it touched a 52-week high $44.90, up 66%. It's trading at more than double its 52-week low $17.62, set late last March.

Net income registered $5 million, or 4 cents a share, in the latest quarter, swinging from a loss of $19 million, or 17 cents a share, in the year-earlier period. The latest adjusted earnings per share totaled 38 cents, up from 22 cents and beating the FactSet-survey-derived analyst consensus of 25 cents.

Teradata’s revenue dipped 1% to $491 million in the quarter from $494 million in the year-earlier quarter. But the latest figure exceeded the FactSet analyst consensus of $475.5 million.

Teradata estimates earnings of 38 cents to 40 cents a share for the first quarter, topping the analyst consensus estimate of 32 cents. And it predicts EPS of $1.50 to $1.58 for the full year, compared with the analyst consensus of $1.55.

“Our cloud-first focus has been recognized by our customers and the marketplace,” Chief Executive Steve McMillan said in a statement. 

“Teradata achieved 165% growth in public cloud [annual recurring revenue] year-over-year and received significant industry endorsement as a leading cloud data platform.”

Further, “We are accelerating our cloud roadmap and bringing cloud-native integrations at a record pace," McMillan said.

Teradata expects to drive at least a doubling of cloud ARR, as well as year-over-year growth in total company revenue, profitability and free cash flow in 2021, he said.