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Xerox Holdings Corporation (XRX) Down 7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Xerox Holdings Corporation (XRX - Free Report) . Shares have lost about 7% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Adjusted EPS of 49 cents beat the Zacks Consensus Estimate and exceeded the year-ago figure, both by more than 100%. The bottom line surpassed our estimate by more than 100% as well.
Total revenues of $1.7 billion surpassed the consensus mark by a slight margin and increased 2.8% year over year on a reported basis. The top line surpassed our estimate by 1.6%. Revenues increased 5.5% on a constant-currency basis.
Demand for the company’s equipment and services remained in good shape in the quarter, benefiting the top line, despite unfavorable macroeconomic situations. The bottom-line growth was driven by a flexible cost base and operational efficiency.
Management stated that for 2023, Xerox remains highly focused on three strategic priorities, client success, profitability, and shareholder returns.
Quarter Details
Print and Other segment’s revenues totaled $1.6 billion, up 4.1% year over year. The Financing segment’s revenues totaled $154 million, down 2.5% year over year.
Sales revenues totaled $659 million, up from $592 million reported in the year-ago quarter. Equipment Sales revenues came in at $391 million, up from $314 million reported in the year-ago quarter. Services, maintenance and rental revenues totaled $1 billion, down 1.9% year over year. Financing revenues of $52 million decreased 1.9% year over year.
Adjusted operating income came in at $118 million against a loss of $3 million in the year-ago quarter. Adjusted operating margin came in at 6.9%.
Xerox exited the quarter with a cash and cash equivalent balance of $591 million compared with $1 billion at the end of the prior quarter. The company’s operating cash flow and free cash flow were $78 million and $70 million, respectively, in the quarter.
2023 Guidance
Xerox expects its 2023 revenue growth to be flat to down low-single-digits on a constant currency basis, adjusted operating margin to be between 5% and 5.5%, and free cash flow of at least $500 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 16.05% due to these changes.
VGM Scores
At this time, Xerox Holdings Corporation has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Xerox Holdings Corporation has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Xerox Holdings Corporation (XRX) Down 7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Xerox Holdings Corporation (XRX - Free Report) . Shares have lost about 7% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Xerox Beats Q1 Estimates
Xerox Holdings Corporation reported better-than-expected first-quarter 2023 results.
Adjusted EPS of 49 cents beat the Zacks Consensus Estimate and exceeded the year-ago figure, both by more than 100%. The bottom line surpassed our estimate by more than 100% as well.
Total revenues of $1.7 billion surpassed the consensus mark by a slight margin and increased 2.8% year over year on a reported basis. The top line surpassed our estimate by 1.6%. Revenues increased 5.5% on a constant-currency basis.
Demand for the company’s equipment and services remained in good shape in the quarter, benefiting the top line, despite unfavorable macroeconomic situations. The bottom-line growth was driven by a flexible cost base and operational efficiency.
Management stated that for 2023, Xerox remains highly focused on three strategic priorities, client success, profitability, and shareholder returns.
Quarter Details
Print and Other segment’s revenues totaled $1.6 billion, up 4.1% year over year. The Financing segment’s revenues totaled $154 million, down 2.5% year over year.
Sales revenues totaled $659 million, up from $592 million reported in the year-ago quarter. Equipment Sales revenues came in at $391 million, up from $314 million reported in the year-ago quarter. Services, maintenance and rental revenues totaled $1 billion, down 1.9% year over year. Financing revenues of $52 million decreased 1.9% year over year.
Adjusted operating income came in at $118 million against a loss of $3 million in the year-ago quarter. Adjusted operating margin came in at 6.9%.
Xerox exited the quarter with a cash and cash equivalent balance of $591 million compared with $1 billion at the end of the prior quarter. The company’s operating cash flow and free cash flow were $78 million and $70 million, respectively, in the quarter.
2023 Guidance
Xerox expects its 2023 revenue growth to be flat to down low-single-digits on a constant currency basis, adjusted operating margin to be between 5% and 5.5%, and free cash flow of at least $500 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 16.05% due to these changes.
VGM Scores
At this time, Xerox Holdings Corporation has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Xerox Holdings Corporation has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.