Amdocs' (DOX) Earnings and Revenues Miss Estimates in Q4
Amdocs' (DOX) fiscal fourth-quarter 2021 results reflect benefits from its core businesses and Sourced, ADK and Clearbridge acquisitions.
Amdocs Limited DOX reported fourth-quarter fiscal 2021 non-GAAP earnings of $1.16 per share, down 5.7% from the year-ago quarter and missed the Zacks Consensus Estimate of $1.18. The bottom line matched the mid-point of management’s previously guided range $1.13-$1.19.
Revenues of $1.09 billion lagged the consensus mark of $1.11 billion but came in line with the mid-point of its previously guided range $1.07-$1.11 billion. Compared with the year-ago quarter, revenues were up 3.3% on a reported basis and 10.2% on a constant currency basis.
The year-over-year increase in the top line highlights benefits from stronger-than-expected performance in the core business, and contributions from the acquisitions of Sourced, ADK and Clearbridge.
Amdocs Limited Price, Consensus and EPS Surprise 
Amdocs Limited price-consensus-eps-surprise-chart | Amdocs Limited Quote
Quarterly Details
North America revenues (66.5% of total revenues) increased 6% year over year to $722.8 million.
Europe revenues (13.5% of total revenues) of $146.8 million decreased 11.2%, year over year. Rest of the World revenues (20% of total revenues) grew 5.7%, year over year to $217.7 million.
Managed services revenues jumped 4.4% year over year to $637.5 million.
The company ended the fiscal fourth quarter 2021 with a 12-month backlog of $3.69 billion, up $100 million sequentially and 10.5%, year on year.
Non-GAAP research & development expenses, as a percentage of revenues, expanded 30 basis points (bps) on a year-over-year basis to 7.4%.
Non-GAAP selling, general & administrative expenses, as a percentage of revenues, flared up 120 bps year over year to 10.9%.
Non-GAAP operating margin expanded 30 bps to 17.5%, primarily on accelerated R&D investments.
Balance Sheet and Cash Flow
Amdocs had cash and short-term investments of $965.6 million as of Sep 30, 2021, compared with $1.05 billion as of Jun 30, 2021.
Net cash provided by operating activities was $199.7 million, up from $189.9 million in the previous quarter and down from $204.7 million in the year-ago period. During the full fiscal 2021, cash provided by operating activities was $926 million.
Free cash flow was $138.8 million compared with the previous quarter’s $139.6 million and the year-earlier quarter’s $145.1 million. During the full fiscal 2021, free cash flow amounted to $715.4 million, mainly driven by record high annual cash collections.
During the fiscal fourth quarter, the company repurchased shares worth $140 million. Amdocs’ board approved a 10% increase in quarterly cash dividend payment to 39.5 cents per share. The dividends will be paid out in April 2022 to the shareholders, given they approve in the upcoming annual meeting to be held in January 2022.
Full-Year Highlights
Amdocs reported record revenues of $4.3 billion in full fiscal 2021, up 7% year over year on a constant currency basis and 2.9% on a reported basis.
Non-GAAP diluted earnings were $4.81 per share, indicating an increase of 9.8% year over year.
Guidance
For fiscal 2022, Amdocs anticipates revenue growth of 3.7-7.7% on a reported basis, compared with the previous forecast of 2.3-3.3%. On a constant currency basis, revenues are projected to increase in the band of 6-10% year over year compared with the earlier projection of 1.3-2.3%.
The updated fiscal 2021 outlook reflects an expected unfavorable foreign-currency impact of 0.3% approximately on a year over year basis.
Adjusted earnings are now estimated to grow between 6.3% and 10.3%, up from the 7.6-9% projected earlier.
For the first quarter of fiscal 2022, the company projects revenues between $1,080 million and $1,120 million and adjusted earnings in the range of $1.15-$1.21 per share.
Zacks Rank & Key Picks
Amdocs currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader computer and technology sector are Salesforce CRM which sports a Zacks Rank #1 (Strong Buy), HP Inc. HPQ and Avnet AVT carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Salesforce, HP and Avnet are currently pegged at 16.8%, 12.7% and 27.7%, respectively.
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