Amdocs chief: Europe a growth engine
Despite unrest in European markets, billing giant's President and CEO Eli Gelman forecasts record earnings of $3.35 billion for 2012. Expanding employee list last year bit into company's net profit
In the fourth quarter of 2011, Amdocs earned $812 million – 6.6% more than the same quarter last year, meeting its Q4 forecasts for earnings of $800-$815 million, published at the end of the third quarter.
Gelman says that growing earnings stem from the company's growing billing business in Europe and steady demand in North America. At the bottom line, Amdocs's fourth quarter non-GAAP net profit was $111.2 million – a 10% drop as compared with the same period last year.
Amdocs' net profit (GAAP adjusted) was $87.4 million – a 7.7% decline as compared with the same quarter in 2010. Part of the decline stems from rising numbers of employees in the company.
As of the end of 2011, Amdocs hit a record $3.18 billion in earnings – 6.5% more than 2010 and more than its 2008 earnings which was the last year in which the company's results were not thwacked by the global crisis.
In a conference call with investors, Gelman noted that the acquisition of Bridgewater System for 211 million Canadian dollars, completed on the fourth quarter of 2011, further cements Amdocs's position in the industry.
On the other hand, Gelman added, macro-economic might water down the company's results for 2012.
"Two quarters ago we regarded Europe as a growth engine and since then, we have been enjoying a positive momentum on the continent which for the time being is not showing any signs of changing", said Gelman.
"We are entering the new year while treading carefully due to macro-economic uncertainty, particularly in Europe."
Amdocs expects to earn $805-$825 million in the first quarter of 2012, and hope to hit a net profit of $96-$112 million – a 23% climb as compared with the same period in the previous year.
"We began 2012 with a large number of new joint projects with global communications services provider," said Gelman.
Amdocs expects to end 2012 on September 30 with $3.33-$3.36 billion in earnings and a $388 million net profit – a 12% increase against 2011.
Amdocs continued its stock buy back in the fourth quarter of 2011. "Since reinstalling the plan on April 2010, we bought back some $1 billion of our common shares in the US," explained Gelman.
In 2011, Amdocs produced $535 million from operating activities, and as of September 30 holds $1.2 billion in cash reserves. The company's order backlog for 2012 is worth $2.67 billion.
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