Amdocs Limited (DOX) has declared financial results for the second quarter of fiscal 2010. Quarterly net income, on a GAAP basis was $68.6 million or 33 cents per share compared to a net income of $80.6 million or 39 cents per share in the prior-year quarter. However, the second-quarter fiscal 2010 adjusted (excluding special items) EPS of 51 cents was slightly above the Zacks Consensus Estimate of 50 cents.
Total revenue of $744 million was up 4.6% year-over-year and also up sequentially by 2.6%. This was also above the Zacks Consensus Estimate of $741 million. Top-line improvement was mainly due to strong demand for managed services and cable/satellite businesses.
Cost of sales in the reported quarter was $476.2 million, an improvement of 1.9% year-over-year. As a result, gross margin in the same quarter was 36% compared to 35.8% in the year-ago quarter. Quarterly operating expenses were $164.7, up 3.8% year-over-year. At the end of the second quarter, total order backlog was $2,460 million compared to $2,425 million at the end of the pervious quarter.
During the first half of fiscal 2010, Amdocs generated $358.1 million of cash from operations compared to $221.6 million in the first half of fiscal 2009. Half-yearly free cash flow (cash flow from operations less capital expenditures) was $318 million compared to $174.1 million in the first half of fiscal 2009.
At the end of the second quarter of fiscal 2010, Amdocs had $1,361.5 million of cash and marketable securities and no outstanding debt on its balance sheet compared to $1,173 million of cash and marketable securities and no outstanding debt at the end of fiscal 2009.
Segment Wise Results
Service revenue was $718 million, up 6.6% year-over-year. License revenue was $26 million, down 30.2% year-over-year. Technologically, Customer Experience revenue was $689 million, up 3.1% year-over-year. Systems Directory revenue was $55 million, up 27.6% year-over-year.
Geographically, North America generated $572.4 million (up 6% year-over-year) of second quarter 2010 revenue, Europe generated $92.1 million (down 12.3% year-over-year), and the Rest of World generated the remaining $79.5 million (up 19.9% year-over-year).
Future Financial Outlook
Management is expecting third quarter fiscal 2010 revenue to be within the range of $750 million – $765 million. Non-GAAP EPS, excluding acquisition-related cost and equity based compensation, is forecasted in the range of 55 cents – 58 cents. Equity-based compensation is expected at approximately 4 cents – 5 cents per share.
EPS, on a GAAP basis, is expected to be within the range of 41 cents – 46 cents. Management has also predicted that the company’s top-line will increase by roughly 1%-2% sequentially throughout fiscal 2010.
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