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Xerox's (XRX) Q4 Earnings Surpass Estimate, Decrease Y/Y

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Xerox Holdings Corporation (XRX - Free Report) reported mixed fourth-quarter 2021 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

Adjusted earnings per share came in at 34 cents, surpassing the consensus mark by 21.4% but declining 41.4% year over year. Total revenues of $1.78 billion lagged the consensus mark by 2.2% and decreased 7.9% year over year on a reported basis and 7.4% on a constant-currency basis.

The company’s shares have declined 11.2% over the past year compared with 2.2% decline of the industry it belongs to.

Quarter in Details

Sales revenues totaled $653 million, down 15.5% year over year. Services, maintenance and rentals revenues totaled $1.07 billion, down 2.9% year over year. Financing revenue of $55 million decreased 1.8% year over year.

Adjusted operating profit of $86 million decreased 53.3% year over year. Adjusted operating margin declined 470 basis points (bps) year over year to 4.8%. Selling, administrative and general expenses, as a percentage of revenues, decreased 100 bps year over year to 23.8%. Research, development and engineering expenses, as a percentage of revenues, came in at 4.2%, up from the year-ago quarter’s 3.9%.

Xerox exited the quarter with cash and cash equivalent balance of $1.8 billion compared with $2.2 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 $198 million of cash from operating activities. Capital expenditures and free cash flow during the quarter were $16 million and $182 million, respectively.

2022 Guidance

Xerox expects revenues to be around $7.1 billion, lower than the current Zacks Consensus Estimate of $7.13 billion. Free cash flow is expected to be at least $400 million.

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.

Some Upcoming Releases

Service providers like Waste Connections (WCN - Free Report) , Waste Management (WM - Free Report) and Republic Services (RSG - Free Report) will report their fourth-quarter 2021 numbers soon.

Waste Connections will release results on Feb 16. The company’s shares have gained 20.1% over the past year.

Waste Management will report quarterly numbers on Feb 2. The company’s shares appreciated 29.1% in a year’s time.

Republic Services will report results on Feb 10. The stock gained 34% over the past year.

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