Amdocs (DOX) Beats Q2 Earnings Estimates, Lags Revenues - Analyst Blog
Amdocs Ltd. DOX reported mixed financial numbers in the second quarter of fiscal 2015 wherein quarterly earnings of 77 cents a share surpassed the Zacks Consensus Estimate of 75 cents.
On a GAAP basis, the company reported net income of $116.3 million or 74 cents per share compared with $110.4 million or 68 cents in the prior-year quarter.
Recently, Amdocs struck a deal with Comverse to acquire the latter’s assets for $272 million in cash. The deal is expected to close by the end of Sep 2015, subject to regulatory approval.
Result Details
Amdocs’ total revenue came in at $902.6 million, up 0.6% year over year, but below the Zacks Consensus Estimate of $915 million. Twelve-month order backlog at the end of the reported quarter stood at $3 billion against $2.94 billion in the prior-year quarter.
Amdocs posted gross margin of 35.7% in the second quarter of 2015 against 34.9% in the year-ago quarter. Operating income stood at approximately $138 million, up 11.5% year over year, whereas operating margin was 15.3% versus 13.8% in the prior-year quarter.
Segment Wise Results
Managed Service revenues totaled $448.8 million, up 5.3% year over year. Customer Experience Solution revenues came in at $877.1 million, highlighting a rise of 1.6% from the year-earlier quarter’s figure while Directory revenues grossed $25.5 million, down 23.4% year over year.
Geographically, North America generated $646.7 million, down 0.8% year over year. Europe recorded $97.6 million in revenues, down 14.2% year over year, while the Rest of the World contributed $158.3 million, up 23.5% year over year.
Other Financial Details
At the end of the second quarter of fiscal 2015, Amdocs generated around $134.9 million in cash from operations compared with 131.1 million at the end of the prior-year quarter. Free cash flow stood at $112.6 million against $105.8 million in the same quarter of the last fiscal. At the end of the reported quarter, Amdocs had approximately $1,292.5 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 $885–$925 million for the third quarter of fiscal 2015. Earnings per share, on a GAAP basis, are expected between 65 cents and 73 cents while non-GAAP earnings per share are projected in the 79–85 cent range.
Stocks to Consider
Amdocs currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry are Barracuda Networks, Inc. CUDA, GTT Communications, Inc. GTT and EPAM Systems, Inc. EPAM. All three carry a Zacks Rank #2 (Buy).
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