Sources inform ''Globes'' that Amdocs (NYSE: DOX) will publish its first ever revenue warning for 2002 in a few days.
Amdocs sources said the revenue warning is intended to lower expectations for the year following an unexpected slowdown in winning new sales contracts. Amdocs earlier expected 2002 sales to total $1.9 billion, implying an additional $500 million in new business this year.
The sources now estimate that Amdocs will revise its forecast to $1.8-1.83 billion, slightly less than the forecasts by investment houses covering the company.
Amdocs' revenue in the quarter ending December 31, 2001, was $422 million, exceeding forecasts. During that quarter, the company announced the signing of 11 new contracts, and management kept its 2002 forecasts of $1.9 billion in sales and profit per share of $1.52.
At the same time it published its financial reports for the preceding quarter, Amdocs raised its forecast for the first quarter of 2002 (the company’s second financial quarter) to $455 million, compared with its previous forecast of $444 million.
Analysts at investment houses estimated in recent months that Amdocs' revenue and profit forecasts were too optimistic, and predicted the company would have to lower them.
Amdocs is the only major Israeli company traded on Wall Street that has not yet published a profit and revenue warning, despite the telecom crisis. The market attributed this fact to the company's business model of long-term contracts with customers, which give the company’s forecasts relatively high transparency.
Amdocs is traded on the NYSE at $22.50 a share, reflecting a market value of $5 billion. The share has fallen 15% in recent days, probably in anticipation of the lower forecasts. The company's value has plunged 40% since the beginning of the year. Amdocs will publish its first quarter 2002 financial report on April 23.
Amdocs has made no comment about the report.
Published by Israel's Business Arena on 7 April 2001