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Xerox Holdings Corporation (XRX - Free Report) reported impressive second-quarter 2021 results, with both earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of 47 cents surpassed the consensus mark by 34.3% and increased more than 100% year over year. Total revenues of $1.8 billion surpassed the consensus mark by 4.8% and surged 22.4% year over year on a reported basis and 18.1% on a constant-currency basis.
The company’s shares have gained 49.3% over the past year, underperforming the 70.1% rally of the industry it belongs to.
Equipment sales revenues totaled $429 million, up 38.4% year over year on a reported basis and 34% on a constant-currency basis, contributing 24% to total revenues. Post-sale revenues totaled $1.4 billion, up 18.1% year over year on a reported basis and 13.8% on a constant-currency basis, contributing 76% to total revenues.
Operating Performance
Adjusted operating profit of $126 million increased more than 100% year over year. Adjusted operating margin expanded 280 basis points (bps) year over year to 7%. Selling, administrative and general expenses, as a percentage of revenues, decreased 490 bps year over year to 24.2%. Research, development and engineering expenses, as a percentage of revenues, came in at 4.4%, down from the year-ago quarter’s 5.2%.
Key Balance Sheet and Cash Flow Figures
Xerox exited the quarter with cash and cash equivalent balance of $2.1 billion compared with $2.4 billion at the end of the prior quarter. Long-term debt was $3.6 billion compared with $3.7 billion at the end of the previous quarter.
The company generated $214 million of cash from operating activities and paid out $54 million as dividends. Capital expenditures and free cash flow during the quarter were $16 million and $198 million, respectively.
2021 Guidance
Xerox expects operating cash flow and free cash flow to be $600 million and $500 million, respectively, for full-year 2021.
Xerox currently carries a Zacks Rank #5 (Strong Sell).
Performance of Some Other Business Services Companies
Equifax (EFX - Free Report) reported better-than-expected second-quarter 2021 results. Adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and improved 23.8% on a year-over-year basis. Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and improved 25.6% year over year.
IHS Markit’s second-quarter fiscal 2021 adjusted earnings per share of 81 cents beat the consensus mark by 1.3% and increased 17.4% on a year-over-year basis. Total revenues came in at $1.2 billion, surpassing the consensus mark by 3.8% and increasing 15% from the year-ago quarter.
Omnicom (OMC - Free Report) reported second-quarter 2021 adjusted earnings of $1.46 per share that beat the consensus mark by 9.8% and increased 58.7% year over year. Total revenues of $3.6 billion surpassed the consensus estimate by 6.7% and increased 27.5% year over year.
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Xerox's (XRX) Second-Quarter Earnings Beat, Increase Y/Y
Xerox Holdings Corporation (XRX - Free Report) reported impressive second-quarter 2021 results, with both earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of 47 cents surpassed the consensus mark by 34.3% and increased more than 100% year over year. Total revenues of $1.8 billion surpassed the consensus mark by 4.8% and surged 22.4% year over year on a reported basis and 18.1% on a constant-currency basis.
The company’s shares have gained 49.3% over the past year, underperforming the 70.1% rally of the industry it belongs to.
Xerox Holdings Corporation Price
Xerox Holdings Corporation price | Xerox Holdings Corporation Quote
Revenues in Detail
Equipment sales revenues totaled $429 million, up 38.4% year over year on a reported basis and 34% on a constant-currency basis, contributing 24% to total revenues. Post-sale revenues totaled $1.4 billion, up 18.1% year over year on a reported basis and 13.8% on a constant-currency basis, contributing 76% to total revenues.
Operating Performance
Adjusted operating profit of $126 million increased more than 100% year over year. Adjusted operating margin expanded 280 basis points (bps) year over year to 7%. Selling, administrative and general expenses, as a percentage of revenues, decreased 490 bps year over year to 24.2%. Research, development and engineering expenses, as a percentage of revenues, came in at 4.4%, down from the year-ago quarter’s 5.2%.
Key Balance Sheet and Cash Flow Figures
Xerox exited the quarter with cash and cash equivalent balance of $2.1 billion compared with $2.4 billion at the end of the prior quarter. Long-term debt was $3.6 billion compared with $3.7 billion at the end of the previous quarter.
The company generated $214 million of cash from operating activities and paid out $54 million as dividends. Capital expenditures and free cash flow during the quarter were $16 million and $198 million, respectively.
2021 Guidance
Xerox expects operating cash flow and free cash flow to be $600 million and $500 million, respectively, for full-year 2021.
Xerox currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other Business Services Companies
Equifax (EFX - Free Report) reported better-than-expected second-quarter 2021 results. Adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and improved 23.8% on a year-over-year basis. Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and improved 25.6% year over year.
IHS Markit’s second-quarter fiscal 2021 adjusted earnings per share of 81 cents beat the consensus mark by 1.3% and increased 17.4% on a year-over-year basis. Total revenues came in at $1.2 billion, surpassing the consensus mark by 3.8% and increasing 15% from the year-ago quarter.
Omnicom (OMC - Free Report) reported second-quarter 2021 adjusted earnings of $1.46 per share that beat the consensus mark by 9.8% and increased 58.7% year over year. Total revenues of $3.6 billion surpassed the consensus estimate by 6.7% and increased 27.5% year over year.