Press release from Business Wire India
Friday, May 06, 2011 01:32 PM IST (08:02 AM GMT)
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Teradata Announces 2011 First Quarter Results
Atlanta, United States, Friday, May 06, 2011 — (Business Wire India) — – First-quarter revenue grew 18 percent, up 16 percent in constant currency(1)
– Operating income increased 6 percent, up 27 percent on a non-GAAP basis(2)
– GAAP EPS was $0.38 in the first quarter of 2011, versus $0.39 in the first quarter of 2010
– Non-GAAP EPS in first quarter 2011 was $0.48 versus $0.41 in the first quarter of 2010(2)
Teradata Corporation (NYSE: TDC) reported revenue of $506 million for the quarter ended March 31, 2011, an increase of 18 percent from $429 million in 2010. The first quarter revenue comparison included 2 percentage points of benefit from currency translation(1).
Included in Teradata’s results reported under U.S. Generally Accepted Accounting Principles (GAAP) for the first quarter of 2011 was $6 million of acquisition-related purchase accounting adjustments in connection with the acquisition of Aprimo, In (Aprimo), $7 million of transaction, integration and reorganization costs, $3 million of amortization of acquisition-related intangible assets and $9 million of stock-based compensation expense. Teradata’s 2010 first quarter results included $5 million of stock-based compensation expense.
Gross margin in the first quarter was 54.3 percent compared to 55.0 percent in the first quarter of 2010. Excluding the items mentioned above, gross margin was 55.7 percent in the first quarter of 2011, an increase from 55.2 percent in the first quarter of 2010 2 The increase in non-GAAP gross margin from the strong prior-year period resulted from an increase in product gross margin, which was somewhat offset by a decrease in consulting services gross margin as Teradata invests to grow its consulting services business to meet market demand.
Net income reported for the first quarter of 2011 was $65 million, or $0.38 per diluted share, which compared to net income of $67 million, or $0.39 per diluted share, in the first quarter of 2010. Excluding the special items, non-GAAP EPS was $0.48 in the first quarter of 2011, versus $0.41 in the first quarter of 2010.(2)
“Teradata is off to a strong start in 2011 with first quarter revenue growth of 18 percent,”said Mike Koehler, president and chief executive officer of Teradata. “Corporations are faced with the challenge of managing and extracting value from data that continues to grow exponentially. In addition, the new data elements coming from sources such as web interactions, social media, mobile computing, and sensors are providing new opportunities for businesses to innovate and compete with analytics. This is placing extreme requirements on data warehouses to scale and manage complexity like we have never seen before – which is where Teradata excels.”
Regional Operating Segment Results
Teradata reports its results in three regional operating segments.
Teradata generated $307 million of revenue in its Americas region in the first quarter of 2011, up 22 percent from $252 million in the first quarter of 2010. Currency translation benefited revenue growth in the Americas by 1 percentage point in the first quarter. (1)
Gross margin in the Americas region in the first quarter of 2011 was 57.0 percent, versus 57.9 percent achieved in the first quarter of 2010. The gross margin decline from the strong prior-year period resulted from lower consulting margin due to headcount additions to meet increased demand, which was offset in part by higher product margin as compared to the first quarter of 2010.
Europe, Middle East and Africa (EMEA)
Revenue in Teradata’s EMEA region in the first quarter of 2011 was $125 million, up 18 percent from $106 million generated in the first quarter of 2010. Currency translation benefited the revenue comparison in the EMEA region by 3 percentage points.(1)
Gross margin in the EMEA region in the first quarter of 2011 was 56.0 percent, up from 53.8 percent reported in the first quarter of 2010 due to a higher product gross margin, which was offset somewhat by lower consulting gross margin resulting from head count additions to meet increased demand.
Asia Pacific / Japan (APJ)
Teradata generated $74 million of revenue in its APJ region in the first quarter of 2011, a 4 percent increase from $71 million in the first quarter of 2010. The revenue comparison in the APJ region benefited by 7 percentage points from currency translation.(1)
Gross margin in the APJ region in the first quarter of 2011 was 40.5 percent, compared to 46.5 percent in the first quarter of 2010. Gross margin declined in the quarter due to a greater proportion of services revenue (as compared to product revenue) which has a lower gross margin than product revenue, as well as lower consulting margins, versus the prior-year period.
First-quarter operating income of $91 million improved from $86 million reported in the first quarter of 2010. Excluding the items previously mentioned, non-GAAP operating income increased 27 percent to $116 million. (2) In the quarter, higher revenue more than offset increased investment in selling, general and administrative expense and research and development expense, as well as the inclusion of Aprimo operating expenses.
The effective income tax rate in the first quarter of 2011 was 28 percent, which compared to a 22 percent tax rate in the prior-year period. The tax rate in the first quarter of 2010 benefited from the recognition of certain foreign net operating loss carry-forwards resulting from an audit settlement in the first quarter of 2010.
During the first quarter of 2011, Teradata generated $106 million of cash from operating activities, compared to $138 million in the prior-year period. The decrease in cash from operating activities was primarily due to the timing of transactional activity. Capital expenditures in the first quarter totaled $27 million compared to $21 million in the first quarter of 2010.
Teradata generated $79 million of free cash flow (cash from operations less capital expenditures for property and equipment and additions to capitalized software) (3) in the first quarter of 2011,versus $117 million in the same period in 2010.
Teradata ended the first quarter of 2011 with $778 million in cash and short-term investments, a $105 million decrease from December 31, 2010. As of March 31, 2011, Teradata had total debt of $300 million under its revolving credit facility.
On January 21, 2011, Teradata completed its acquisition of Aprimo and funded the purchase by using $200 million of net cash and by drawing-down the full $300 million borrowing capacity from the Company’s existing revolving credit facility.
Subsequent to the end of the first quarter, Teradata completed its acquisition of Aster Data Systems, Inc (Aster Data) on April 5, 2011. Teradata funded the purchase of Aster Data by utilizing funds from a new $300 million long-term loan facility, which is not reflected in the Teradata’s balance sheet as of March 31, 2011.
Also subsequent to March 31, 2011, the Company repaid $280 million of the $300 million previously drawn on the revolving credit facility largely from cash collected from accounts receivables in April.
Teradata is increasing its expectation for full-year 2011 revenue growth to 14-16 percent. Teradata anticipates that currency fluctuations will benefit the year-over-year revenue comparison by approximately 4 percentage points, based on currency rates on April 29, 2011.
GAAP earnings per share in 2011 is expected to be in the $1.76 to $1.86 range. Due to Teradata’s increased expectation for full-year revenue growth, the company now expects it will be able to more than absorb the anticipated $0.03 of EPS dilution from the acquisition of Aster Data and therefore is increasing its prior 2011 non-GAAP EPS guidance to $2.13 to $2.23. Teradata excludes estimated purchase accounting adjustments, amortization of acquisition-related intangible assets, stock-based compensation expense, as well as transaction, integration and reorganization costs to arrive at non-GAAP earnings per share.
2011 First-Quarter Earnings Conference Call
A conference call is scheduled today at 8:30 a.m. (ET) to discuss the company’s first-quarter 2011 results. Access to the conference call, as well as a replay of the call, is available on Teradata’s web site at www.teradata.com/investor.
Supplemental financial information regarding Teradata’s operating results is also available on the Investor Relations page of Teradata’s web site.
Teradata Corporation (NYSE: TDC) is the world’s leader in data warehousing and integrated marketing management through its database software, data warehouse appliances, and enterprise analytics. For more information, visit teradata.com .
Teradata is a trademark or registered trademark of Teradata Corporation in the United States and other countries
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