) has declared its financial results for the third quarter of
fiscal 2012, beating the Zacks Consensus Estimates. The company has
increased its non-GAAP EPS forecast for fiscal 2012. Meanwhile,
Amdocs's business with its major client
), though stabilized somewhat, has yet to reach its peak.
Initiation of Dividend
On July 31, 2012, at a special shareholders' meeting the
company's shareholders approved the initiation of a $0.13 quarterly
cash dividend program. The Board of Directors of Amdocs on August
1, 2012 approved this first dividend, which is payable on October
19, 2012 to shareholders of record at the close of business on
September 30, 2012.
Third Quarter Results in Details
Quarterly net income, on a GAAP basis, was $98.7 million or 59
cents per share compared with net income of $91.8 million or 50
cents per share in the prior-year quarter. Adjusted (excluding
special items) earnings per share stood at 64 cents in the reported
quarter, beating the Zacks Consensus Estimate of 62 cents.
Quarterly total revenue came in at $808.8 million, representing
0.9% year-over-year growth, but was below the Zacks Consensus
Estimate of $817.0 million.
Quarterly gross margin was 35.7% in the quarter compared with
34.9% in the year-ago quarter. Reported operating income was
approximately $110.0 million, up 4.1% year over year. Operating
margin was 13.6% versus 13.2% in the prior-year quarter.
At the end of the third quarter of fiscal 2012, total order
backlog was $2,760 million compared with $2,725 million at the end
of the previous quarter. In the reported quarter, Amdocs
repurchased shares worth $122 million.
During the first nine month of fiscal 2012, Amdocs generated
around $362.0 million in cash from operations compared with $387.9
million in the prior-year period. Free cash flow (cash flow from
operations less capital expenditure) in the first nine month of
2012 was $282.8 million compared with $307.8 million in the
At the end of the third quarter of fiscal 2012, Amdocs had
approximately $894.1 million in cash and marketable securities and
no 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.
Service revenue was $774.4 million, up 0.27% year over year.
License revenue was approximately $34.4 million, up 18.4% year over
year. Customer Experience Systems revenue was $766.2 million, up
2.0% year over year. Directory revenue was $42.6 million, down
15.31% year over year. The company's core Managed Services revenue
was $426.8 million, up 11.1% year over year.
Geographically, North America generated $558.7 million, down
4.5% year over year; Europe generated $106.5 million, up 0.94% year
over year; while the Rest of the World contributed the remaining
$143.6 million, up 29.4% year over year. Revenue from the emerging
markets came in at $101.7 million, showing annualized growth of
Future Financial Outlook
Management expects the revenue of the fourth quarter of fiscal
2012 to be in the range of $815 million - $835 million. EPS, on a
GAAP basis, is expected between 54 cents - 62 cents. Moreover,
non-GAAP EPS, including 5 cents - 6 cents per share of equity-based
compensation expense, is projected in the range of 66 cents - 72
For fiscal 2012, Amdocs expects its total revenue to grow by
approximately 3% - 3.5% year over year and its non-GAAP EPS to
increase by at least 14% - 16% year over year.
Additionally, Amdocs recently announced that it has won a
five-year managed service contract from TIM Brazil and will serve
its Wireless, Wireline and Broadband segments.
We maintain our long-term Neutral recommendation on Amdocs.
Currently, the shares of Amdocs have a Zacks #3 Rank, implying a
short-term Hold rating.
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