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Amdocs (DOX) Earnings & Revenues Beat Estimates in Q2

Amdocs Ltd.DOX reported second-quarter 2016 results wherein earnings of 86 cents a share easily outpaced the Zacks Consensus Estimate. However, on a GAAP basis, the company reported net income of $107.7 million or 71 cents compared with $116.3 million or 74 cents in the prior-year quarter.

Q2 Details

Amdocs' total revenue came in at $926 million, up 2.6% year over year and also surpassed the Zacks Consensus Estimate of $925 million. Twelve-month order backlog, at the end of the second quarter of fiscal 2016, was $3.1 billion compared with $3.09 billion in the prior-year quarter.

Amdocs posted gross margin of 35.2% in the reported quarter compared with 35.7% in the year-ago quarter. Operating income stood at approximately $120.1 million, down 13% year over year, whereas operating margin was 13% versus 15.3% in the prior-year quarter.

Segment-Wise Results

Managed Service revenues totaled $501.1 million, up 2.8% year over year. Customer Experience Solution revenues came in at $902.3 million, a 0.9% rise from the year-earlier quarter figure. Meanwhile, Directory revenues grossed $23.6 million, down 12.9% year over year.

Geographically, North America generated $586.4 million, down 1.7% year over year. Europe recorded $139.2 million in revenues, up 8% year over year, while the Rest of the World contributed $200.3 million, down 7.2% year over year.

Liquidity

At the end of first six months of fiscal 2016, Amdocs generated around $316.7 million in cash from operations compared with 343.6 million at the end of same period last fiscal. At the end of the said period, free cash flow stood at $291.7 million compared with $335.5 million at the end of fiscal 2015. Meanwhile, at the end of the second quarter of 2016, Amdocs had approximately $1,150.1 million in cash, cash equivalents and short-term interest-bearing investments compared with $1,354 million at the end of fiscal 2015.

Financial Outlook

Management projects revenues in the range of $910-$950 million for the third quarter of fiscal 2016. Earnings per share, for the same period on a GAAP basis, are expected between 63 cents and 71 cents while non-GAAP earnings per share are projected in the 84-90 cent range.

Dividend Payments

Following the earnings announcement, Amdocs declared a cash dividend of 19.5 cents per share to be paid on Jul 15, 2016, to shareholders of record as of Jun 30, 2016.

Zacks Rank & Stocks to Consider

Amdocs currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry are Barracuda Networks, Inc. CUDA , Science Applications International Corporation SAIC and CoStar Group Inc. CSGP . All the three companies sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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