Teradata Corporation TDC reported first-quarter 2017 results, wherein adjusted earnings per share of 20 cents topped the Zacks Consensus Estimate of 19 cents. However, it declined 46% on a year-over-year basis.The company reported non-GAAP earnings of 28 cents in the quarter, compared with 47 cents in the year-ago quarter.Revenue Details Total revenue of $491 million missed the Zacks Consensus Estimate of $498.4 million. Moreover, it plunged 9.9% on a year-over-year basis. This was mainly due to the company’s ongoing business transformation activity, under which its large customers have begun shifting to subscription pricing offerings.Products and Cloud revenues decreased 20% year over year to $166 million. Services revenues fell 4% on a year-over-year basis to $325 million. Revenues from Americas Data and Analytics decreased 9% year over year while that from International Data and Analytics grew 4% from the prior-year quarter.Teradata Corporation Price, Consensus and EPS Surprise Teradata Corporation Price, Consensus and EPS Surprise | Teradata Corporation QuoteMarginNon-GAAP gross margin contracted 310 basis points (bps) from the year-ago quarter to 51.1% mainly due to lower volume.The company reported non-GAAP operating income of $58 million, down from $92 million reported in the prior-year quarter. Non-GAAP operating margin shrunk to 11.8% from 18% reported year over year.Balance SheetTeradata exited the quarter with $1.164 billion in cash and cash equivalents, compared with $917 million at the end of the previous-year quarter. Teradata had long-term debt of $523 million at the end of the first quarter comapred with $560 million at the end of first-quarter 2016.In the first quarter, Teradata generated cash flow from operations of $248 million, compared with $250 million in the first quarter of 2016. Free cash flow generated was $230 million, compared with $224 million in the year-ago quarter.GuidanceTotal revenue for the second quarter of 2017 is expected to be approximately $510–$530 million. Non-GAAP earnings per share are expected in the range of 25–30 cents.The Zacks Consensus Estimate for revenues and earnings per share for the current quarter is pegged at $531.13 million and 30 cents, respectively.To ConcludeTeradata revenues are getting impacted by the company’s ongoing business transformation. Earlier, management had pointed out that the transition will affect revenues in 2017 to the extent of 5–10%. Also, restructuring related costs, a sluggish spending environment in the domestic market and increasing competition from the likes of IBM Corp IBM and Oracle Corp ORCL and others will continue to weigh on its financials. Notably, the stock has underperformed the Zacks categorized Computer-Storage Devices industry in the last one year. The industry gained 58.08% in the said period while Teradata returned just 23.55%.However, over the long run, the company is expected to benefit from transition to a subscription-based revenue model. Plus, strategic partnerships with the other big tech giants and acquisitions should bode well for long-term growth.Currently, Teradata has a Zacks Rank #3 (Hold).Stock to ConsiderA better-ranked stock in the broader technology sector is APPLIED OPTOELECTRONICS, INC. AAOI, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The company has delivered an average positive earnings surprise of 116.49% in the trailing four quarters.The Best & Worst of ZacksToday you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Teradata Corporation (TDC): Free Stock Analysis Report International Business Machines Corporation (IBM): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report Applied Optoelectronics, Inc. (AAOI): Free Stock Analysis Report To read this article on Zacks.com click here.