Amdocs Ltd. ( DOX ) reported strong financial results for the third quarter of fiscal 2014. The quarterly adjusted net earnings came in at 77 cents a share that surpassed the Zacks Consensus Estimate of 74 cents. On a GAAP basis, the company reported earnings of 68 cents per share compared with 73 cents per share in the prior-year quarter.
Further Unveiling the Results
Total revenue of this Zacks Rank #3 (Hold) stock came in at $902.5 million, up 7.3% year over year, and almost in line with the Zacks Consensus Estimate of $902 million. This figure marks an all-time high for the company.
Amdocs is continuously improving its strategic position in the North America, Latin America and Southeast Asia, whereas its strategic position remains stable in Europe. Bell Canada, a division of BCE Inc. ( BCE ) has selected Amdocs Convergent Charging product as its next generation charging solution.
Amdocs has strengthened its managed services agreement with Vodafone Group plc. ( VOD ) with the addition of two more Vodafone affiliates to its portfolio. Additionally, Telefonica S.A. ( TEF ) recently selected Amdocs for its new quad-play transformation projects in Peru and Chile.
Order backlog at the end of the reported quarter stood at $2,970 million against $2,830 million at the end of the year-ago quarter. Amdocs posted a gross margin of 35.2% that expanded 2 basis points from the year-ago quarter.
Operating income stood at approximately $125 million, up 1.5% year over year, whereas operating margin contracted 70 basis points to 13.9%. In the reported quarter, Amdocs repurchased shares worth $93 million.
Service revenues totaled $890.6 million, up 8.3% year over year. License revenues were approximately $11.9 million, down 36.3% year over year. Technologically, Customer Experience Systems revenues came in at $870.8 million, up 8.4% from the year-earlier quarter while Directory revenues were $31.7 million, down 16.8% year over year. The company's core Managed Services revenues stood at $438 million, up 5% from the prior-year quarter.
Geographically, North America generated $647.2 million, up 4.5% year over year. Europe recorded $114.6 million revenues, up 16.9% year over year, while the Rest of the World contributed $140.7 million, up 13.4% year over year. Revenues from the emerging markets stood at $116.9 million, up 15.4% year over year.
Other Financial Details
During the first nine months of fiscal 2014, Amdocs generated around $516.4 million in cash from operations compared with $438.8 million in the comparable period of fiscal 2013. Free cash flow during the first nine months of fiscal 2014 stood at $438.5 million, up from $358.7 million in the same period of the last fiscal year.
At the end of the reported quarter, Amdocs had approximately $1,174.6 million in cash, cash equivalents and short-term interest-bearing investments compared with $1,326.4 million at the end of fiscal 2013. The balance sheet remains free of debt.
Management expects revenues in the range of $890-$920 million for the fourth quarter of fiscal 2014. Earnings per share, on a GAAP basis, are expected between 61 cents and 69 cents. Moreover, non-GAAP earnings per share, excluding 5-6 cents per share of equity-based compensation expense, are projected in the 75-81 cents range.
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