It has been about a month since the last earnings report for Xerox Holdings Corporation (XRX - Free Report) . Shares have added about 13.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Xerox Holdings Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Xerox Beats On Q3 Earnings Estimates
Xerox reported impressive second-quarter 2021 results, with both earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share came in at 48 cents, surpassing the consensus mark by 11.6% and remaining flat year over year. Total revenues of $1.76 billion lagged the consensus mark by 3.8% and decreased 0.5% year over year on a reported basis and 1.6% on a constant-currency basis.
Quarter Details
Sales revenues totaled $657 million, up 1% year over year. Services, maintenance and rentals revenues totaled $1.05 billion, down 1.4% year over year.
Adjusted operating profit of $74 million decreased 43.5% year over year. Adjusted operating margin declined 320 basis points (bps) year over year to 4.2%. Selling, administrative and general expenses, as a percentage of revenues, increased 160 bps year over year to 23.5%. Research, development and engineering expenses, as a percentage of revenues, came in at 4.7%, up from the year-ago quarter’s 4.3%.
Xerox exited the quarter with cash and cash equivalent balance of $2.2 billion compared with $2.1 billion at the end of the prior quarter. Long-term debt was $3.7 billion compared with $3.6 billion at the end of the previous quarter.
The company generated $100 million of cash from operating activities. Capital expenditures and free cash flow during the quarter were $19 million and $81 million, respectively.
2021 Guidance
Xerox expects revenues to be around $7.1 billion. Free cash flow is expected to be at least $500 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -49.63% due to these changes.
VGM Scores
At this time, Xerox Holdings Corporation has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Xerox Holdings Corporation has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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It has been about a month since the last earnings report for Xerox Holdings Corporation (XRX - Free Report) . Shares have added about 13.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Xerox Holdings Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Xerox Beats On Q3 Earnings Estimates
Xerox reported impressive second-quarter 2021 results, with both earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share came in at 48 cents, surpassing the consensus mark by 11.6% and remaining flat year over year. Total revenues of $1.76 billion lagged the consensus mark by 3.8% and decreased 0.5% year over year on a reported basis and 1.6% on a constant-currency basis.
Quarter Details
Sales revenues totaled $657 million, up 1% year over year. Services, maintenance and rentals revenues totaled $1.05 billion, down 1.4% year over year.
Adjusted operating profit of $74 million decreased 43.5% year over year. Adjusted operating margin declined 320 basis points (bps) year over year to 4.2%. Selling, administrative and general expenses, as a percentage of revenues, increased 160 bps year over year to 23.5%. Research, development and engineering expenses, as a percentage of revenues, came in at 4.7%, up from the year-ago quarter’s 4.3%.
Xerox exited the quarter with cash and cash equivalent balance of $2.2 billion compared with $2.1 billion at the end of the prior quarter. Long-term debt was $3.7 billion compared with $3.6 billion at the end of the previous quarter.
The company generated $100 million of cash from operating activities. Capital expenditures and free cash flow during the quarter were $19 million and $81 million, respectively.
2021 Guidance
Xerox expects revenues to be around $7.1 billion. Free cash flow is expected to be at least $500 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -49.63% due to these changes.
VGM Scores
At this time, Xerox Holdings Corporation has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Xerox Holdings Corporation has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Buy 5 Stocks BEFORE Election Day
Biden or Trump? Zacks is releasing a FREE Special Report, Profit from the 2024 Presidential Election (no matter who wins).
Since 1950, presidential election years have been strong for the market. This report names 5 timely stocks to ride the wave of electoral excitement.
They include a medical manufacturer that gained +11,000% in the last 15 years… a rental company absolutely crushing its sector… an energy powerhouse planning to grow its already large dividend by 25%... an aerospace and defense standout that just landed a potentially $80 billion contract… and a giant chipmaker building huge plants in the U.S.
Don’t Wait. Download FREE >>
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