Enterprise data warehousing solutions provider Teradata Corporation (TDC) reported Thursday an increase in net profit for the third quarter, as a 3% decline in revenues was nearly offset by improved services gross margins and lower expenses. On an adjusted basis, earnings surpassed the Street view. The Atlanta, Georgia-based company also raised its full year 2009 earnings guidance.
For the third quarter, net earnings were $63 million or $0.36 per share compared with $60 million or $0.33 per share in the prior-year period. On an adjusted basis, earnings per share rose to $0.38 from $0.36 in the previous year. Adjusted results for the period exclude a charge of $0.02, compared to $0.01 in the prior year, with regard to impairment of equity investment, and a one-tome charge of $0.02 in connection with federal income tax accrual adjustment.
On an average, nine analysts polled by Thomson Reuters expected Teradata to earn $0.29 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the period were down 3% to $425 million from $439 million in the third quarter of fiscal 2008. Analysts expected the company to generate revenues of $425.70 million during the quarter.
Revenues from products were $191 million versus $213 million a year earlier, while revenues from services rose 4% to $234 million from $226 million in the previous year.
Product gross margin for the third quarter was 62.3% compared to 64.3% in the corresponding period prior year. Teradata said services gross margin for the quarter improved to 46.2% from 44.2% last year, benefited by higher professional services margin, as the company continues to effectively manage expenses while increasing the productivity of its professional services resources.
By geography, revenues from Americas region were $247 million compared with $253 million, revenues from Asia Pacific/Japan or APJ region dropped to $69 million from $80 million, whereas Europe, Middle East and Africa or EMEA region generated revenues of $109 million versus $106 million in the prior year.
During the three-month period, selling, general and administrative expenses incurred by the company declined to $113 million from $123 million, and research and development costs were $26 million versus $28 million in the 2008-year period.
In the preceding second quarter, Teradata had reported a net income of $62 million or $0.36 per share versus $69 million or $0.38 per share in the previous year. Total revenues for the quarter had declined 7% to $421 million from $455 million in the second quarter of fiscal 2008.
For the nine-month period, the company's net income edged down to $170 million or $0.98 per share from $171 million or $0.94 per share in the year-ago period. Year-to-date revenues were $1.21 billion compared to $1.27 billion in the corresponding period prior year.
Looking ahead to fiscal 2009, Teradata currently expects earnings to be in a range of $1.32 to $1.36 per share from its prior view of $1.22 to $1.28 per share. The company presently anticipates adjusted earnings for the year to be between $1.34 and $1.38 per share, up from its previous expectations of $1.22 to $1.28 per share.
Analysts currently expect the company to earn $1.42 per share for the year on revenues of $1.68 billion.
Among peers, International Business Machines Corp. (IBM) on October 15 said that its third quarter profit rose 14% from last year, as a lower tax rate, improved gross margins and tight cost control more than offset a 7% revenue drop. The Armonk, New York-based technology giant reported a net income of $3.21 billion compared to $2.82 billion last year. On a per share basis, earnings were $2.40, flat with the previous year. Total revenues for the third quarter fell 7% to $23.57 billion from $25.30 billion in the same quarter last year.
In Thursday's regular trading session, TDC is currently trading on the New York Stock Exchange at $28.95 per share down $0.08 or 0.28% on a volume of 1.2 million shares. In the past 52-week period, the shares have been trading in a range of $11.11 to $29.85.
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