"Fiscal year 2008 comes to a close amid headlines of government bailouts and plunging global equity markets. And yet, for Amdocs, it was another good year," stated Amdocs Ltd. (NYSE: DOX) president and CEO Dov Baharav and chairman Bruce Anderson in their statement to shareholders appended to the company's Form 20-F 2008 financial report for the fiscal year that ended on September 30. The company filed the form with the US Securities and Exchange Commission (SEC) yesterday.
Baharav and Anderson continued, "We achieved double-digit revenue growth, increased our customer base by more than 20 new customers and deepened our relations hips with others. We also grew our pipeline of future business. We believe the keys to our growth are our diverse business model and focus on the converging communications, media and entertainment industry."
They caution, however, "It is almost certain that the world’s financial woes will affect service providers, potentially weakening their appetite for large-scale systems transformations. But challenging economic conditions could also create a more critical need for our customers to consolidate operations to achieve cost efficiencies, engage with a trusted partner to manage their applications, or modernize or scale their systems…"
Despite this caveat, Baharav and Anderson are optimistic. "Amdocs delivers value that our competitors cannot match. As our customers strive to achieve their business goals in these uncertain economic times, we believe Amdocs is their best bet."
Amdocs posted a net profit of $378.9 million ($1.76 per share) on $3.16 billion revenue in fiscal year 2008, compared with net profit of $364.9 million ($1.64 per share) on $2.84 billion revenue in fiscal year 2007.
28% of Amdocs's revenue in 2008, $885 million, came from AT&T Inc. (NYSE: T) and its subsidiaries, up from 22% of Amdocs's revenue in 2007. The company's three largest customers, AT&T, Bell Canada Inc. (TSX: BC), and Sprint Nextel Corporation (NYSE: S) account for 51% of its total revenue. Amdocs warned, "Our business is dependent on a limited number of significant customers, and the loss of any one of our significant customers could harm our results of operations."
A few days ago, AT&T announced that it will lay off 4% of its workforce and planned to reduce its capital expenditure in 2009. AT&T owns 5.1% of the company.
In a separate development, Amdocs today completed the acquisition of Changing Worlds Ltd., a provider of personalization and intelligent portal solutions for mobile service providers for $60 million in cash, net of cash on hand.
Amdocs's share fell 1.7% in early trading today to $17.64.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2008
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