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Ahead of the Bell: Teradata sinks on outlook cut

NEW YORK (AP) -- Shares of Teradata Corp. tumbled before Tuesday's opening bell after the data management company cut its full-year guidance, saying that its business outside of the U.S. and Europe struggled during its recently completed quarter.

In premarket trading, Teradata shares fell $8.43, or 16 percent, to $44.15. If the losses hold during the regular trading session, it would mark the stock's lowest price in nearly two years.

The company released third-quarter profit and revenue figures that fell short of Wall Street predictions, pointing to a 21 percent drop in revenue from the Asia, Pacific, and Japan markets and a 19 percent decrease in revenue from the Middle East and Africa.

For the full year, the company cut its outlook for adjusted earnings per share to a range of $2.70 to $2.80 per share on revenue flat with its 2012 total of $2.67 billion.

The company had earlier called for income of $3.05 to $3.20 per share for the year, and said revenue would grow 6 to 10 percent, to $2.82 billion to $2.93 billion. In August, the company said it would reach the low end of its net income guidance.

Analysts, on average, were expecting earnings of $3.05 per share and $2.78 billion in revenue for the year.

The news prompted Sterne Agee analyst Alex Kurtz to cut his rating for Teradata stock to "Neutral" from "Buy," pointing to the company's lower projected growth rate and the limited opportunity for the stock to significantly recover anytime soon.

Jefferies analyst Aaron Schwartz backed his "Hold" rating for the stock, but cut his price target by $7 to $51, saying that the lowered expectations for the rest of the year will likely boost worries that the company is facing pricing and competitive challenges.