Wake Up to Teradata

In June, we suggested that investors step up and buy Teradata Corp. (TDC). The data-management company had reported better-than-expected numbers for the first quarter, with revenue clocking in at $628 million vs. average estimates of $615 million and earnings that were even more surprising, at $0.54 per share vs. the $0.47 the consensus. The shares, however, traded off on comments that first-quarter results cannibalized sales from the then-upcoming second quarter. We felt that this selloff was a buying opportunity and suggested investors step up and buy TDC in the low $40s.

Fast forward to Aug. 7, the day Teradata reported second-quarter numbers. As with the first quarter, Teradata reported another strong quarter. Revenue was $676 million vs. a $661 million consensus. Earnings were also much better again, at $0.72 vs. the $0.67 estimate. And management again explained how the second-quarter results would cannibalize the third quarter. Better-than-expected sales in a current quarter at the expense of possible future quarters is a problem that we are OK with having (many companies miss sales and complain they were pushed out to future quarters, which we are far more wary of)....409 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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