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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 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.
The company’s shares have gained 11% over the past year, underperforming the 52.8% growth of the industry it belongs to.
Xerox Holdings Corporation Price, Consensus and EPS Surprise
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, lower than the current Zacks Consensus Estimate of $7.27 billion. Free cash flow is expected to be at least $500 million.
Recent Performance of Some Other Business Services Companies
Equifax (EFX - Free Report) reported better-than-expected third-quarter 2021 results. Adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined 1.1% on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year.
IQVIA Holdings (IQV - Free Report) reported impressive third-quarter 2021 results, with earnings per share of $2.17 beating the consensus mark by 1.9% and improving 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year.
Omnicom (OMC - Free Report) reported third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.
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Xerox's (XRX) Q3 Earnings Surpass Estimate, Remain Flat 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 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.
The company’s shares have gained 11% over the past year, underperforming the 52.8% growth of the industry it belongs to.
Xerox Holdings Corporation Price, Consensus and EPS Surprise
Xerox Holdings Corporation price-consensus-eps-surprise-chart | Xerox Holdings Corporation Quote
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, lower than the current Zacks Consensus Estimate of $7.27 billion. Free cash flow is expected to be at least $500 million.
Xerox currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Some Other Business Services Companies
Equifax (EFX - Free Report) reported better-than-expected third-quarter 2021 results. Adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined 1.1% on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year.
IQVIA Holdings (IQV - Free Report) reported impressive third-quarter 2021 results, with earnings per share of $2.17 beating the consensus mark by 1.9% and improving 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year.
Omnicom (OMC - Free Report) reported third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.