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Xerox Holdings Corporation (XRX) Down 0.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Xerox Holdings Corporation (XRX - Free Report) . Shares have lost about 0.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Xerox Holdings Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Xerox Beats On Q4 Earnings Estimates
Xerox 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.
Quarter 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. Free cash flow is expected to be at least $400 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 -30.56% due to these changes.
VGM Scores
Currently, Xerox Holdings Corporation has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 this revision 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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Xerox Holdings Corporation (XRX) Down 0.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Xerox Holdings Corporation (XRX - Free Report) . Shares have lost about 0.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Xerox Holdings Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Xerox Beats On Q4 Earnings Estimates
Xerox 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.
Quarter 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. Free cash flow is expected to be at least $400 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 -30.56% due to these changes.
VGM Scores
Currently, Xerox Holdings Corporation has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 this revision 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.