Billing and CRM sytems company Amdocs (NYSE: DOX) reported record revenue of $820 million in its second fiscal quarter, up 15% over the corresponding quarter of 2007 and higher than the consensus analysts' estimate of $811.06 million.
Non-GAAP net profit grew 9.9% to $132.5 million, or $0.61 per share, at the higher end of the company's guidance range, and above the analysts' consensus of $0.60 per share.
Net profit on a GAAP basis was $100.7 million, or $0.46 per share.
The company has raised its third quarter guidance, and says it now expects revenue of $825-835 million and earnings per share of $0.61-0.63.
"We attribute the strong performance to the first complete quarter of AT&T revenue recognition and better than expected execution at Sprint," Merrill Lynch comments in a report entitled "Good quarter; solid guidance."
"This is the second consecutive quarter that management has raised guidance while other telecom-exposed names have been much more conservative. We note that the company has a backlog of $2.42 billion, providing management good visibility into the next few quarters. We see a few drivers for revenue and profit over the next few quarters: a few AT&T contracts, Comcast (small), OSS opportunities in N. America, opportunities in the broadband, cable, and satellite segments, and opportunities in the emerging markets."
Merrill Lynch reiterates a "Buy" recommendation for Amdocs shares, saying, "We still do not see many large transformational opportunities globally. However, it is interesting to note that a combination of a few small deals has generated upside to backlog both this quarter and in the prior quarter…We also note that spending on BSS projects proved very resilient in prior down cycles, given they help the carriers in competitive markets, reducing churn and supporting growth in revenues."
Merrill Lynch's price objective for Amdocs shares is $43, which compares with a closing price of $28.80 in New York yesterday. Amdocs has a market cap of nearly $6 billion.
Published by Globes [online], Israel business news - www.globes.co.il - on July 24, 2008
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