We reiterate our long-term Neutral recommendation on
). The company reported mixed financial results for the second
quarter of fiscal 2013.
Why Keeping at Neutral?
Amdocs is performing well in the emerging markets of Asia and
Latin America while facing a tough environment in Europe due to
macroeconomic headwind. Amdocs' sales opportunity in North
America is more visible after the business with
) gained stabilization.
In the reported quarter, the company achieved key production
milestones in the modernization of
United States Cellular Corp.
) and the Netherlands division of
Vodafone Group plc.
Amdocs offers a portfolio of industry-leading technology
integration products of managed services for large
transformational projects. We believe that the long-term
fundamentals of the company remain intriguing due to the
transition of the telecom industry to converged IP solutions.
Further, the company has a healthy balance sheet.
Amdocs recently launched its state-of-the-art CES 9 product
suite. CES 9 is the industry leading fully-integrated platform of
BSS, OSS and Network control. This platform will enable
multi-channel customer care and real time full integration of
devices and network across video, wireless, fixed-mobile
converged and high-speed broadband Internet services.
Nevertheless, Amdocs is exposed to the global economic
downturn, particularly those events that affect the
telecommunications industry. The macroeconomic scenario is yet to
recover completely. In addition, delay in business transformation
on the part of the carriers may reduce capital spending.
Economic and political uncertainty in Europe may jeopardize
the company's financials, going forward. Furthermore, as the
company is operating globally, it is also exposed to foreign
currency exchange rate risk. In the last quarter, the company was
negatively affected by $2 million of foreign exchange
fluctuations. Furthermore,the recent consolidation trend in the
U.S. telecom industry may act as a major concern for Amdocs.
AMDOCS LTD (DOX): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
US CELLULAR (USM): Free Stock Analysis Report
VODAFONE GP PLC (VOD): Free Stock Analysis
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