Teradata anticipates quarterly loss amid moves to retrench.

Teradata anticipates quarterly loss amid moves to retrench 

Teradata Corp., a shooting star among computer-system manufacturers in the 1980s, will likely report its first quarterly loss in four years Oct. 30 and continue its month-old remedy - retrenchment.

Also this week, management will ask shareholders, who have seen their stock price drop to $9 last week from a March high of $35.50, to re-elect the eight-member board of directors at the annual meeting Nov. 1.

Just how serious is Teradata's run in the red?

"This is just a one-term deal," said Teradata spokeswoman Robin Tanchum. "We feel that our long-term growth and health is very, very strong."

Top management declined to comment prior to announcing their financials this week. Teradata had previously estimated a hefty $50 million loss.

Most securities analysts who track the $224 million (fiscal 1990 revenues) El Segundo corporation attended the American Electronics Association financial conference in Monterey last week.

The loss follows annual revenue increases averaging nearly 200 percent, and steady profit growth, for the last four years.

This year's dive by Teradata shares is extraordinarily steep. It outstrips the relevant Dow Jones computer-industry average since this year's bear market began. From July, shares are off about 60 percent, compared with a 19 percent drop by the Dow computer-stock group.

Teradata's shares entered this tailspin despite bullish recommendations by a number of Wall Street watchers.

The $9 stock interested James Reynolds in late July, when it was trading for about $26. The Los Angeles-based analyst at Wedbush, Morgan Securities predicted, in a L.A. Times feature story, it would climb to $40 a share by June 1991, its fiscal year end.

Allen N. Strand in mid-September predicted a "price objective" of $35 within one year. The Bateman Eichler, Hill Richards analyst said, "Teradata's markets are growing rapidly and should not be impacted by a mild recession."

But analysts saw the market battered by the recession and Persian Gulf war fears. Then Teradata management announced Sept. 27 it expected the heavy one-quarter loss, amounting to about $50 million, or 40 cents to 50 cents a share.

The next day, analyst John B. Jones of Montgomery Securities stuck by the company, identifying "an aggressive buying opportunity" of Teradata, which earned $1.48 a share last year. He dropped his 1991 earnings estimate from $1.80 to $1.05 a share.

Jones said Teradata remains "very competitive" with rival IBM. He saw no challenge to its business niche. (The company's "relational" database computer systems manage vast tables of data for airline reservation systems, retail inventory, and the like.) And Jones approved of management's response to the quarterly loss - a downsizing:

* Top management took 5 percent salary cuts and CEO Kenneth W. Simonds, 10 percent.

* All hiring, except for sales staff, was frozen. No layoffs will result, said spokeswoman Tanchum.