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Why Is Amdocs (DOX) Up 3.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Amdocs (DOX - Free Report) . Shares have added about 3.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Amdocs due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Amdocs’ Q1 Earnings and Revenues Surpass Estimates
Amdocs Limited 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -5.62% due to these changes.
VGM Scores
At this time, Amdocs has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Amdocs has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Amdocs (DOX) Up 3.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Amdocs (DOX - Free Report) . Shares have added about 3.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Amdocs due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Amdocs’ Q1 Earnings and Revenues Surpass Estimates
Amdocs Limited 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -5.62% due to these changes.
VGM Scores
At this time, Amdocs has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Amdocs has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.