UPDATE 1-Weak customer spending hurts Amdocs outlook

Tue May 1, 2012 5:54pm EDT

* Q2 adj EPS $0.67 vs est $0.64

* Q2 rev $809 mln vs est $811.5 mln

* Cuts FY rev growth view to 3-4 pct from 5-6 pct earlier

* Initiates qtrly cash dividend of $0.13/shr

May 1 (Reuters) - Customer service software maker Amdocs Ltd cut its full-year revenue growth forecast, citing a slow recovery in capital spending at key customer AT&T.

Amdocs, which provides the U.S. wireless operator with customer service and billing software, expects revenue for the year to grow 3 percent to 4 percent, down from its previous expectation of 5 percent to 6 percent.

AT&T accounted for 29 percent of the company's overall sales in 2011. Bell Canada and Sprint Nextel are its other key customers.

"Our outlook for AT&T revenue has weakened for the remainder of the fiscal year," said CEO Eli Gelman.

Amdocs, however, raised its full-year adjusted earnings per share growth forecast to at least 12 percent to 14 percent from its prior expectation of a growth of 11 percent to 13 percent.

The company, which supplies software and services for business and operational support systems used by telecom providers, also said its board had decided to initiate a quarterly cash dividend of 13 cents per share.

Net income for the second quarter rose to $101.9 million, or 60 cents per share, from $94.1 million, or 50 cents per share, a year ago. Excluding items, the company earned 67 cents per share, topping analysts' expectations of 64 cents.

Revenue rose 2.5 percent to $809 million, but came in below analysts' forecast of $811.5 million.

Shares of Amdocs, which have risen 8 percent since it reported first-quarter earnings on Feb. 1, closed at $32.18 on Tuesday on the New York Stock Exchange.

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