Amdocs' (DOX) Q1 Earnings and Revenues Surpass Estimates

Amdocs (NASDAQ:DOX) Limited DOX reported first-quarter fiscal 2022 non-GAAP earnings of $1.20 per share, which increased 3.4% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $1.19. The bottom line was higher than the mid-point of the guided range of $1.15-$1.21.

Record revenues of $1.11 billion beat the consensus mark of $1.10 billion and came above the mid-point of the guided range of $1.08-$1.12 billion. Compared with the year-ago quarter, revenues were up 1.7% on a reported basis and 10.6% on a constant currency basis.

Amdocs’ top-line performance was primarily driven by North America’s high activity levels among top consumers. However, foreign currency movements subdued the figure.

Amdocs Limited Price, Consensus and EPS Surprise

Quarterly Details

North America reported record revenues of $745 million (67.5% of total revenues), indicating a 6% year-over-year surge.

Europe revenues (12.9% of total revenues) of $143 million slumped 17%, year over year. Rest of the World revenues (19.6% of total revenues) grew 2.5% year over year to $217 million.

Managed services revenues jumped 5.8% year over year to $660 million.

The company ended fiscal first-quarter 2022 with a 12-month backlog of $3.83 billion, up $140 million sequentially and 9.7%, year on year.

Non-GAAP research & development expenses, as a percentage of revenues, expanded 40 basis points (bps) on a year-over-year basis to 7.3%.

Non-GAAP selling, general & administrative expenses, as a percentage of revenues, increased 20 bps year over year to 10.8%.

Non-GAAP operating margin expanded 20 bps to 17.5%.

Balance Sheet and Cash Flow

Amdocs had cash and short-term investments of $868.8 million as of Dec 31, 2021, compared with $965.6 million as of Sep 30, 2021.

Net cash provided by operating activities was $204 million, up from $199.7 million in the previous quarter and down from $416.5 million in the year-ago period. Free cash flow was $146.9 million compared with the previous quarter’s $138.8 million and the year-earlier quarter’s $366.4 million.

During the fiscal first quarter, the company repurchased shares worth $171 million. Amdocs’ board approved the new increased quarterly cash dividend rate of 39.5 cents per share. The dividends will be paid out on Apr 29, 2022 to the shareholders of record as of Mar 31, as approved in the annual general meeting held in January.

Guidance Update

For fiscal 2022, Amdocs now anticipates revenue growth of 3.4-7.4% on a reported basis, compared with the previous forecast of 3.7-7.7%. On a constant currency basis, revenues are projected to increase in the band of 6-10% year over year, in line with the earlier projection.

The updated fiscal 2022 outlook reflects an expected unfavorable foreign-currency impact of approximately 0.6% on a year-over-year basis compared with the previous forecast of 0.3%.

Adjusted earnings are still estimated to grow between 6.3% and 10.3%.

For the second quarter of fiscal 2022, the company projects revenues between $1,110 million and $1,150 million and adjusted earnings in the range of $1.22-$1.28 per share. The outlook reflects an expected unfavorable foreign-currency impact of approximately $2 million.

Zacks Rank & Key Picks

Amdocs currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader computer and technology sector include the iPhone maker Apple AAPL, sporting a Zacks Rank #1 (Strong Buy), Analog Devices (NASDAQ:ADI) ADI and Axcelis Technologies (NASDAQ:ACLS) ACLS, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by 3.6% to $1.43 per share over the past seven days. For fiscal 2022, earnings estimates have moved upward by 5.9% to $6.15 per share in the past seven days.

Apple’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 20.3%. AAPL stock has appreciated 30.4% in the past year.

The Zacks Consensus Estimate for Analog Devices’ first-quarter fiscal 2022 earnings has been revised downward by a penny to $1.68 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 7 cents to $7.53 per share in the past 30 days.

Analog Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.1%. Shares of ADI have increased 12.1% in the past year.

The Zacks Consensus Estimate for Axcelis Technologies fourth-quarter 2021 earnings has been revised upward by 16 cents to 84 cents per share over the past 90 days. For 2021, earnings estimates have moved north by 8.5% to $2.67 per share in the last 90 days.

Axcelis’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 24.2%. Shares of ACLS have rallied 75.2% in the past year.

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