ST. LOUIS -- Key recent highlights:
Revised fiscal year 2012 guidance: 14-16% non-GAAP EPS growth expected in fiscal 2012, raised from previous expectation of 12-14%. Expected revenue growth of 3-3.5% on a constant currency basis, compared to 3-4% previously. Expected reported revenue growth of 2-2.5% includes the effects of higher than anticipated negative foreign currency fluctuations
Amdocs Limited (DOX) today reported that for its third fiscal quarter ended June 30, 2012, revenue was $808.8 million, flat from the second fiscal quarter of 2012 and up 0.9% as compared to last year's third fiscal quarter. Net income on a non-GAAP basis was $118.4 million, or $0.70 per diluted share, compared to non-GAAP net income of $113.3 million, or $0.61 per diluted share, in the third quarter of fiscal 2011.
Non-GAAP net income excludes amortization of purchased intangible assets and other acquisition related costs and equity-based compensation expenses of $19.6 million, net of related tax effects, in the third quarter of fiscal 2012 and excludes such amortization and other acquisition related costs and equity-based compensation expenses of $21.5 million, net of related tax effects, in the third quarter of fiscal 2011.
The Company's GAAP net income for the third quarter of fiscal 2012 was $98.7 million, or $0.59 per diluted share, compared to GAAP net income of $91.8 million, or $0.50 per diluted share, in the prior year's third fiscal quarter.
"Demonstrating our confidence in the future success of Amdocs and our commitment to delivering a compelling total return to our shareholders, we continued to execute on our share repurchase plan during the third fiscal quarter and will initiate our first quarterly dividend in the coming months. Additionally, we have increased our non-GAAP earnings per-share guidance to 14-16% growth for the full fiscal year of 2012 from 12-14% previously. This guidance captures operating performance consistent with our prior expectations and the benefit of share repurchase activity completed to date," said Eli Gelman, chief executive officer of Amdocs Management Limited.
Gelman continued, "Our third fiscal quarter results reflect on-going momentum in the emerging markets and managed services, steady business activity in Europe, tempered spending in North America, and greater currency headwinds. Overall, this led to revenue performance roughly in-line with the midpoint of our expectations, excluding the impact of currency fluctuations. In the emerging markets, we continue to see solid momentum across Southeast Asia and Latin America with both new and existing customers. In Latin America, we signed our first managed services engagement. In Europe, we gained some additional traction in managed services during the third quarter. North American results were consistent with our expectations and reflect stable activity with AT&T compared to the previous quarter."
Gelman concluded, "During the quarter, we signed several key strategic wins. In our broadband, cable and satellite group, we extended our long-term agreement with DIRECTV, the largest satellite company in North America, for an additional 5 years and expanded the scope of our activities with this key customer. We won additional business in the North American pre-paid wireless market which is a growing segment for communications service providers. In the emerging markets, we announced an agreement with TIM Brasil that marks our first BSS and OSS managed services win in Latin America as well as our first ever OSS managed services agreement. We have built a solid relationship with TIM Brasil over the years, including serving its wireless, wireline and, most recently, residential broadband operations, which are now all captured under this managed services engagement.
Additionally, in Europe we won an important new managed services deal with a large wireless service provider during the third quarter."
Financial Discussion of Third Fiscal Quarter Results
Free cash flow was $108 million for the quarter, comprised of cash flow from operations of $138 million less $30 million in net capital expenditures and other.
Twelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was $2.76 billion at the end of the third quarter of fiscal 2012, up $35 million from the end of the second fiscal quarter of 2012.
Amdocs expects that revenue for the fourth quarter of fiscal 2012 will be approximately $815-$835 million. Diluted earnings per share on a non-GAAP basis for the fourth fiscal quarter are expected to be $0.66-$0.72, excluding amortization of purchased intangible assets and other acquisition related costs and approximately $0.05-$0.06 per share of equity-based compensation expense, net of related tax effects. Amdocs estimates GAAP diluted earnings per share for the fourth fiscal quarter will be $0.54-$0.62.
Quarterly Cash Dividend Program
On July 31, 2012, at a special shareholders meeting, the Company's shareholders approved the institution of a quarterly cash dividend program at the quarterly rate of $0.13 per share. On August 1, 2012, the Board approved the first dividend payment and set September 30, 2012 as the record date for determining the shareholders entitled to receive the dividend, which is payable on October 19, 2012.