Amdocs' (NYSE:DOX) Margins Fall; Revenue, EPS Estimates Lowered

Amdocs Ltd. (NYSE:DOX) had a decent quarter, but weak margins caused the company to miss on the bottom line, resulting in revenue and EPS estimates for 2011, 2012 to be lowered.

FBR says, "Last night, Amdocs reported mixed December results, as the company posted better-than-expected top-line results, sequential increase in backlog, and a miss on the bottom line as margins came in at the low end of expectations in the quarter. Despite the bottom-line miss, we would categorize the December quarter’s performance as respectable, as Amdocs made substantial progress on its previously stated initiatives (emerging market customer win, re-scoping contract with Clearwire, employee productivity programs, and complex customer implementations) and appears to be bulking up its pipeline in the field—positive dynamics that over the long term should help improve the company’s current slow top-line growth trajectory.

"For F2Q11, our revenue estimate of $782.5 million remains unchanged, while we are increasing our pro forma EPS estimate to $0.57 from $0.55 to reflect a lower share count. For FY11, we are lowering our revenue and pro forma EPS estimates to $3.16 billion and $2.24 down from $3.17 billion and $2.27. For FY12, we are lowering our revenue and pro forma EPS estimates to $3.35 billion and $2.51 down from $3.36 billion and $2.56."

FBR Capital reiterates a 'Market Perform' rating on Amdocs Ltd. (DOX), which closed Wednesday at $29.27, gaining $0.44, or 1.53 percent. FBR has a price target of $30 on Amdocs.