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Xerox's (XRX) Earnings Miss Estimates in Q1, Increase Y/Y
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Xerox Holdings Corporation (XRX - Free Report) reported mixed first-quarter 2021 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same.
Adjusted earnings per share of 22 cents missed the consensus mark by 4.4% but increased 4.8% year over year. Total revenues of $1.71 billion surpassed the consensus mark by 5.7% but declined 8.1% year over year on a reported basis and 10.4% on a constant-currency basis. The coronavirus pandemic had a significant negative impact on the company’s quarterly results.
Notably, the company’s shares have gained 42.1% over the past year, underperforming the 75.6% rally of the industry it belongs to.
Revenues in Detail
Equipment sales revenues totaled $381 million, up 17.2% year over year on a reported basis and 14.2% on a constant-currency basis, contributing 22% to total revenues. Post-sale revenues totaled $1.33 billion, down 13.4% year over year on a reported basis and 15.6% on a constant-currency basis, contributing 78% to total revenues.
Operating Performance
Adjusted operating profit of $89 million increased 2.3% year over year. Adjusted operating margin expanded 50 basis points (bps) year over year to 5.2%. Selling, administrative and general expenses, as a percentage of revenues, decreased 290 bps year over year to 26.2%. Research, development and engineering expenses, as a percentage of revenues, were 4.3%, down from the year-ago quarter’s 4.5%.
Xerox Holdings Corporation Price, Consensus and EPS Surprise
Xerox exited the quarter with cash, cash equivalents and restricted cash balance of $2.38 billion compared with $2.63 billion at the end of the prior quarter. Long-term debt was $3.67 billion compared with $4.05 billion at the end of the previous quarter.
The company generated $117 million of cash from operating activities and paid out $54 million as dividends. Capital expenditures and free cash flow during the quarter were $17 million and $100 million, respectively.
2021 Guidance
Xerox expects operating cash flow and free cash flow to be $600 million and $500 million, respectively, in 2021.
Investors interested in the broader Zacks Business Services sector are keenly awaiting first-quarter 2021 earnings of key players like Waste Connections (WCN - Free Report) , Waste Management (WM - Free Report) and Republic Services (RSG - Free Report) . While Waste Connections will release its earnings on Apr 28, Waste Management and Republic Services will report the same on Apr 27 and May 5, respectively.
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Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
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Xerox's (XRX) Earnings Miss Estimates in Q1, Increase Y/Y
Xerox Holdings Corporation (XRX - Free Report) reported mixed first-quarter 2021 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same.
Adjusted earnings per share of 22 cents missed the consensus mark by 4.4% but increased 4.8% year over year. Total revenues of $1.71 billion surpassed the consensus mark by 5.7% but declined 8.1% year over year on a reported basis and 10.4% on a constant-currency basis. The coronavirus pandemic had a significant negative impact on the company’s quarterly results.
Notably, the company’s shares have gained 42.1% over the past year, underperforming the 75.6% rally of the industry it belongs to.
Revenues in Detail
Equipment sales revenues totaled $381 million, up 17.2% year over year on a reported basis and 14.2% on a constant-currency basis, contributing 22% to total revenues. Post-sale revenues totaled $1.33 billion, down 13.4% year over year on a reported basis and 15.6% on a constant-currency basis, contributing 78% to total revenues.
Operating Performance
Adjusted operating profit of $89 million increased 2.3% year over year. Adjusted operating margin expanded 50 basis points (bps) year over year to 5.2%. Selling, administrative and general expenses, as a percentage of revenues, decreased 290 bps year over year to 26.2%. Research, development and engineering expenses, as a percentage of revenues, were 4.3%, down from the year-ago quarter’s 4.5%.
Xerox Holdings Corporation Price, Consensus and EPS Surprise
Xerox Holdings Corporation price-consensus-eps-surprise-chart | Xerox Holdings Corporation Quote
Key Balance Sheet and Cash Flow Figures
Xerox exited the quarter with cash, cash equivalents and restricted cash balance of $2.38 billion compared with $2.63 billion at the end of the prior quarter. Long-term debt was $3.67 billion compared with $4.05 billion at the end of the previous quarter.
The company generated $117 million of cash from operating activities and paid out $54 million as dividends. Capital expenditures and free cash flow during the quarter were $17 million and $100 million, respectively.
2021 Guidance
Xerox expects operating cash flow and free cash flow to be $600 million and $500 million, respectively, in 2021.
Xerox currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Investors interested in the broader Zacks Business Services sector are keenly awaiting first-quarter 2021 earnings of key players like Waste Connections (WCN - Free Report) , Waste Management (WM - Free Report) and Republic Services (RSG - Free Report) . While Waste Connections will release its earnings on Apr 28, Waste Management and Republic Services will report the same on Apr 27 and May 5, respectively.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>