Teradata, Apple, and Rackspace Dragged SKYY Last Week
Teradata sales see decline in both segments
In 2Q15, Teradata Corp. (TDC) reported revenues of $575 million in its Data and Analytics segment and $48 million in its Marketing Applications segment. This compares to its 2Q14 revenues of $623 million and $53 million, respectively.
In comparison, peer companies like IBM (IBM) and Accenture (ACN) posted revenues of $20.8 billion and $8.27 billion, respectively, in 2Q15.
Operating income
Teradata reported a loss of $262 million GAAP (generally accepted accounting principles) in 2Q15 compared to an operating profit of $133 million in 2Q14 due to its goodwill impairment charge. On a non-GAAP basis, operating income for 2Q15 was $107 million in comparison to $159 million in 2Q15.
This was due to lower revenue, gross margin, the impact of currency fluctuations, and higher expenses resulting from investments that TDC undertook for future growth.
Cash flow
Cash flow from operating activities was $80 million in 2Q15, compared with $138 million in 2Q14. Free cash flow generated also saw a decline from $53 million in 2Q15 to $113 million in 2Q14. This was due to lower net income and the timing of payables.
Outlook
Teradata has lowered its full-year revenues guidance for 2015. Full-year 2015 revenue is expected to be lower by 3%–6% on a reported basis and up by 0%–3% on a constant currency basis in comparison to 2014. Revenue for 2015 is expected to be ~$2.6 billion and the EPS is expected to be $2.35.
The CEO of Teradata, Mike Koehler, is confident regarding the firm’s long-term prospects. He noted, “With better aligned and focused end-to-end resources, we are rapidly advancing our growth initiatives and improving operating efficiencies. We remain confident in our industry-leading solutions and competitive positions in the markets we serve, and have a number of actions in progress to better position Teradata in 2016 and beyond.”
Teradata (TDC) constitutes 3.18% of the First Trust ISE Cloud Computing Index ETF (SKYY) and 0.18% of the Technology Select Sector SPDR ETF (XLK).
Browse this series on Market Realist: