Wednesday, Amdocs Ltd. (DOX), a software and service provider to the communication service industry, said its second quarter earnings fell from last year, as revenues declined year-on-year hampered by the ongoing strain in the global economy. Earnings, however, came in ahead of Wall Street estimates. Going forward, the company provided its fourth quarter forecast, indicating earnings to come in lower than reported in the year-ago quarter.
The Chesterfield, Missouri-based Amdocs' third-quarter net income dipped to $85.5 million or $0.42 per share from $100.7 million or $0.46 per share in the same quarter last year. On a non-GAAP basis, net income was $108.6 million or $0.53 per share, down from $132.5 million or $0.61 per share a year ago. On average, 16 analysts polled by Thomson Reuters expected the company to earn $0.48 per share for the quarter. Analysts' estimates typically exclude special items.
Non-GAAP net income for the quarter excludes amortization of purchased intangible assets and equity-based compensation expenses of $23.0 million, net of related tax effects and excludes such amortization, in-process research and development write-off and equity-based compensation expenses of $31.8 million, net of related tax effects, in the third quarter of fiscal 2008.
Commenting on the results, Dov Baharav, chief executive officer of Amdocs said, "We are pleased with our results for the third fiscal quarter, particularly in light of the on-going strain in the global economy. Favorable foreign currency movements increased third quarter revenue and EPS relative to our expectations for the quarter."
Quarterly revenue declined 15% to $690.3 million from $820.3 million in the comparable quarter last year, but came in ahead of 18 analysts' consensus estimate of $678.93 million.
License revenue for the quarter was down at $26.08 million, compared to $35.24 million in the prior-year period, while Service revenues slipped to $664.19 million from $785.04 million a year ago.
Operating income for the quarter was $93.25 million, down from $105.95 million in the prior-year period.
For the the nine-month period, the company posted net income of $240.43 million or $1.16 per share, compared to $296.19 million or $1.36 per share in the corresponding period a year ago. Non-GAAP net income was $329.68 million or $1.59 per share, down from $382.4 million or $1.75 per share in the previous year.
Revenues for the nine-month period was $2.155 billion, a decline from $2.337 billion in the comparable period last year.
Amdocs indicated that twelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was $2.37 billion at the end of the third quarter of fiscal 2009.
Baharav added, "Demand conditions, however, remain weak, particularly for large transformational projects, as our customers manage their budgets tightly. As a result, we anticipate that our revenue may continue to trend down sequentially, albeit at a moderating pace, until we see demand improve. This view is reflected in our fourth fiscal quarter guidance, and we believe this trend could persist into early fiscal 2010."
Looking ahead to the fourth quarter, the company expects revenue in the range of $670 million - $690 million with earnings in the range of $0.34 - $0.39 per share. On a non-GAAP basis net income is expected to range between $0.47 and $0.51 per share. Analysts currently anticipate earnings of $0.48 per share on revenue of $667.70 million. In the year-ago quarter, the company posted non-GAAP earnings of $0.54 per share and GAAP earnings of $0.38 per share.
DOX closed Wednesday's trading at $23.06, up $0.11 or 0.48%, on a volume of about 1.81 million shares. The stock during the 52-week period, traded in the range of $14.61 - 31.37, on a 3-month average volume of about 1.23 million shares.
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