) fourth quarter fiscal 2012 adjusted earnings per share
(excluding special items) stood at 66 cents, beating the Zacks
Consensus Estimate of 64 cents. The impressive outcome was
primarily based on the stabilization of Amdocs's business with
its major client
) to some extent and the continuous double-digit growth in the
emerging markets. The company has increased its Non-GAAP earnings
per share forecast for the first quarter of fiscal 2013 and has
authorized a repurchase plan of $500 million of ordinary shares
without any expiry date.
Extension of Sprint Contract
Amdocs announced that it has extended its managed service
) till 2021 and has also added Virgin Mobile branded subscribers
to its platform. The deal is envisioned to provide solid revenue
visibility in North America over the long haul. Similar deals
with Globe of Philippines, TIM Brazil in Latin America and the
recently announced business support service deal with Russia's
VimpelCom will further enhance the growth prospect of the company
in the emerging markets.
Fourth Quarter Results in Details
Quarterly net income, on a GAAP basis, was $98.0 million or 60
cents per share compared with a net income of $87.4 million or 49
cents per share in the prior-year quarter. Quarterly total
revenue came in at $822.1 million, up 1.2% year over year, but it
marginally missed the Zacks Consensus Estimate of $824 million.
Amdocs posted gross margin of 35.6% in the quarter against
35.3% in the year-ago quarter. Reported operating income was
approximately $113.5 million, up 8.6% year over year. Again,
operating margin was 13.8% against 12.9% in the prior-year
quarter. At the end of the fourth quarter of fiscal 2012, total
order backlog was $2,790 million compared with $2,760 million at
the end of the previous quarter. In the reported quarter, Amdocs
repurchased shares worth $106 million.
During fiscal 2012, Amdocs generated around $514.1 million in
cash from operations compared with $535.5 million in the
prior-year period. Free cash flow (cash flow from operations less
capital expenditure) at the end of fiscal 2012 stood at $392.0
million compared with $425.7 million at the end of fiscal
At the end of fiscal 2012, Amdocs had approximately $1,118.2
million in cash and marketable securities and $200 million of
outstanding debt on its balance sheet compared with $1,173.5
million of cash and marketable securities and $250 million of
outstanding debt at the end of fiscal 2011.
Segment Wise Results
Service revenue was $798.1 million, up 2.24% year over year.
License revenue was approximately $24.0 million, down 24% year
over year. Technologically, Customer Experience Systems revenue
was $783.1 million, up 4.9% year over year. Directory revenue was
$39.0 million, showing an 18.1% yearly drop. The company's core
Managed Services revenue came in at $423.7 million, up 10.1% year
Geographically, North America generated $570.4 million, down
2.5% year over year; Europe generated $113.1 million, up 10.9%
year over year; while the rest of the world contributed the
remaining $138.6 million, up 10.8% year over year. Revenue from
the emerging markets came in at $99.9 million, showing an
annualized growth of 25.7%.
Management expects the first quarter fiscal 2012 revenues to
be in the range of $810 -840 million. Earnings per share, on a
GAAP basis, are expected between 54-64 cents. Moreover, non-GAAP
earnings per share, including 6-7 cents per share of equity-based
compensation expense, are projected in the range of 68-74 cents.
For fiscal 2013, Amdocs expects its total revenue to grow by
approximately 2-5% year over year and its non-GAAP earnings per
share to increase by at least 5-8% year over year.
We maintain our long-term Neutral recommendation on Amdocs
Ltd. Currently, the company retains a Zacks#3 Rank, implying a
short-term Hold rating.
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