Amdocs (DOX) Beats Q1 Earnings Estimates, Lags Revenues

Amdocs Ltd. (DOX) reported encouraging financial numbers in the first quarter of fiscal 2015 wherein quarterly earnings of 88 cents a share surpassed the Zacks Consensus Estimate of 81 cents.

On a GAAP basis, the company reported net income of $131 million or 83 cents per share compared with $101.4 million or 63 cents in the prior-year quarter.

Result Details

Total revenue of this Zacks Rank #3 (Hold) stock came in at $906.3 million, up 4.9% year over year, but below the Zacks Consensus Estimate of $910 million.

Amdocs’ business opportunities in the U.S. are more visible after the stabilization of business with major customer, AT&T, Inc. (T), and the renewal of long-term contracts with several leading telecom and cable TV operators.

Earlier, AT&T selected Amdocs to help the company achieve its goal of establishing a user-defined network cloud. Telefonica’s (TEF) Argentina also chose Amdocs for the alteration of its wireline business support system (BSS) operations. Also, Sprint Corporation (S) extended its management services deal with Amdocs.

Twelve-month order backlog at the end of the reported quarter stood at $3.03 billion, increasing by $30 million from the end of the prior quarter.

Amdocs posted gross margin of 36.7% against 35.5% in the year-ago quarter. Operating income stood at approximately $141.5 million, up 17.2% year over year, whereas operating margin expanded 160 basis points to 15.6%.

Segment Wise Results

Managed Service revenues totaled $467.1 million, up 8.8% year over year. Customer Experience Solution revenues came in at $882.4 million, highlighting a rise of 6.4% from the year-earlier quarter’s figure while Directory revenues grossed $23.9 million, down 30.5% year over year.

Geographically, North America generated $659.1 million, up 5% year over year. Europe recorded $106.9 million in revenues, down 8.6% year over year, while the Rest of the World contributed $140.3 million, up 17.9% year over year.

Other Financial Details

At the end of the first quarter of fiscal 2015, Amdocs generated around $208.4 million in cash from operations compared with 186.5 million at the end of fiscal 2014. Free cash flow, during the same period, stood at $171.7 million against $159.8 million in the same period of the last fiscal. At the end of the reported quarter, Amdocs had approximately $1,268.6 million in cash, cash equivalents and short-term interest-bearing investments compared with $1,424.5 million at the end of fiscal 2014.

Financial Outlook

Management expects revenues in the range of $900–$930 million for the second quarter of fiscal 2015. Earnings per share, on a GAAP basis, are expected between 64 cents and 72 cents while non-GAAP earnings per share are projected in the 78–84 cents range.

For fiscal 2015, year-over-year growth for total revenue is expected between the guided range of 2.5–-5.5%. Meanwhile, non-GAAP earnings per share are projected to rise 4.5–7.5% year over year.