Amdocs Limited (NYSE: DOX) today reported that for the first quarter ended December 31, 2005, revenue was $587.0 million, an increase of 25.0% from last year’s first quarter. Excluding acquisition-related costs and equity-based compensation expense, net of related tax effects, of $14.7 million, net income was $90.0 million, or $0.42 per diluted share, compared to net income, excluding $3.0 million of acquisition-related costs net of related tax effects, of $72.4 million, or $0.34 per diluted share, in the first quarter of fiscal 2005. The Company’s net income was $75.3 million, or $0.36 per diluted share, compared to net income of $69.4 million, or $0.32 per diluted share, in the first quarter of fiscal 2005. Free cash flow, defined as cash flow from operations less net capital expenditures and principal payments on capital leases, was $69.3 million in the quarter.
Dov Baharav, Chief Executive Officer of Amdocs Management Limited, said, “We continue to execute according to plan as shown by our very good financial performance and the new business we signed during the quarter. Many of this quarter’s sales highlight the fact that service providers are looking for an integrated, best-of-suite offering that allows them to leverage their existing investments with Amdocs as they expand their system capabilities in order to cope with consolidation and industry convergence. Service providers are also looking for solutions to support rapid introduction of new, IP-based and bundled services, while reducing total cost of ownership. Our leading product offering combined with our track record of delivery in complex projects makes us the vendor of choice as we demonstrated with our nine significant new wins this quarter.”
“We expect that the continuation of the industry dynamics that contributed to our success in 2005 will also drive our performance in 2006. We are the leading provider to our market and our unique ability to address these needs combined with our top-tier customer base gives us confidence that 2006 will be an exceptional year for Amdocs,” continued Baharav.
The Amdocs wins in the first quarter span lines of business and geographies. They include an expansion of Amdocs activities at a major North American wireless carrier as this carrier consolidates systems across markets. In Europe, Amdocs will support an existing customer as this customer expands its MVNO-related activities. In the directory business, Amdocs is building on its long-term relationships with AT&T and BellSouth to help YELLOWPAGES.COM efficiently manage customer data and digital content, as well as to automate all online advertising workflow activities. The Company is also in the initial stages of a large project to provide software and managed services to a wireless customer in Europe.
On January 17, 2006, Sprint Nextel announced that it has reached a preliminary agreement with Amdocs to provide a single platform to support Sprint Nextel’s more than 46 million wireless subscribers. Said Baharav, “We are delighted that Sprint Nextel has reconfirmed Amdocs as a strategic partner and we look forward to a long and mutually rewarding relationship with Sprint Nextel.”
In the first quarter of fiscal 2006 Amdocs adopted Statement of Financial Accounting Standard No. 123 (revised 2004), Share-based Payment, which requires the expensing of equity-based compensation. Equity-based compensation expense was $9.7 million, net of tax, or $0.04 per diluted share, in the first quarter.
Amdocs expects that revenue for the second quarter of fiscal 2006 ending March 31, 2006, will be approximately $600 million. Diluted earnings per share for the quarter are expected to be $0.42, excluding acquisition-related costs, net of related tax effects, and the impact of approximately $0.04-$0.05 per share of equity-based compensation expense. Diluted GAAP EPS is expected to be approximately $0.35-$0.36.
Updated fiscal 2006 guidance: Expected revenue of approximately $2.42- $2.47 billion and diluted EPS of $1.68-$1.72, excluding acquisition-related costs, net of related tax effects, and approximately $0.16-$0.19 per share of equity-based compensation expense. Diluted GAAP EPS is expected to be approximately $1.40-$1.47.
Amdocs will host a conference call on January 18, 2006 at 5 p.m. Eastern Time to discuss the Company’s first quarter results. The call will be carried live on the Internet via http://www.vcall.com/ and the Amdocs website, http://www.amdocs.com/.