What Amdocs Says about Billing and Cable Co.'s

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Includes: CHTR, CMCSA, DISH, DOX, RTLX, T, VIAB
by: Judy Weil

Israel-based Amdocs Ltd. provides billing and customer service software. In their recent earnings call, they indicate that the major impact on earnings has been the fluctuations in the currency markets. Israeli billing firm Retalix (NASDAQ:RTLX) reported on their Q208 conference call that they were experiencing similar declines in revenues from ForEx. 

On a positive note, Amdocs said it expects continued growth for cable companies. From Amdocs' FQ408 conference call:

We don't see cancellation of current activities. We signed many deals in the recent few months and even in the recent few weeks. However, [that] might provide us confidence regarding Q1 and Q2, but not Q3 and Q4. 

ForEx: 

Revenues with a value of 3% have been erased due to the adverse impact of foreign exchange on us… With the drastic changes in currencies that we've seen since September, we have decided to extensively increase our balance sheet hedge in order to greatly mitigate for such effects going forward. 

Dollar is still the safe haven:  

We're keeping all our investments of the excess cash and the short-term portfolio in U.S. dollar. [Although] interest rates have gone down dramatically over this period. 

Layoffs: 

We had to part from 700 employees lately in areas that we saw that we have some surpluses. And we are adjusting the activity… more focus on things like travel and ongoing expenses within the company 

Where they see growth: 

Managed services: We help our customers to save money in this tough period.

OSS [operation support systems]: We are growing very fast in OSS, and carriers are willing to replace their network in order to save money, in order to move to IP, in order to create new capabilities. And we have the leading OSS platform.

Cable: Cable is not going to be affected in this marketplace as it has not been affected in 2002, because people in [a] recession will watch TV and not go to restaurants. And we believe that given our recent wins in the cable industry, we will grow our activity.

Emerging markets: We enjoyed growth in 2008, and we expect additional growth in 2009.