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Xerox Holdings Corporation (XRX - Free Report) reported lower-than-expected fourth-quarter 2023 results, wherein earnings and revenues declined from the year-ago quarter. Despite the earnings miss, the stock gained 5% since the company’s earnings release on Jan 25.
Adjusted earnings per share (EPS) of 43 cents missed the Zacks Consensus Estimate by 15.7% and decreased 51.7% year over year. Total revenues of $1.77 billion lagged the consensus mark by 1.6% and decreased 9.1% year over year on a reported basis. Revenues declined 7.4% on a constant-currency basis.
Xerox Holdings’ shares have gained 19.2% over the past year, outperforming the 17.6% increase in the industry it belongs to.
Revenue Details
Post-sale revenues were $1.3 billion, down 5.8% from the year-ago quarter’s figure and missing our estimate of $1.35 billion. Equipment sales decreased 17.3% year over year to $458 million, falling short of our estimate of $441.6 million. Equipment sales and post-sale revenues declined 18.3% and 7.5%, respectively, year over year, on a constant currency basis.
Xerox Holdings Corporation Price, Consensus and EPS Surprise
The Print and Other segment’s revenues totaled $1.69 billion, down 9.5% year over year. FITTLE’s revenues of $100 million increased 1% from the year-ago reported quarter.
Sales revenues were $721 million, down 15.3% year over year. Services, maintenance and rental revenues tumbled 3.8% year over year to $1 billion. Financing revenues of $44 million fell 13.7% year over year.
Operating Performance
Adjusted operating income amounted to $96 million, up more than 46.1% on a year-over-year basis. Adjusted operating margin was 5.4%, down from the year-ago 9.2%.
Kay Balance Sheet and Cash Flow Figures
XRX exited the quarter with a cash and cash equivalent balance of $519 billion compared with $532 million at the year-ago quarter end. The company’s operating cash flow and free cash flow were $389 million and $379 million, respectively, in the reported quarter.
2024 Guidance
Management expects 2024 revenue growth to be 3-5% on a constant currency basis. Adjusted operating margin is anticipated to be around 7.5%. Free cash flow is forecast to be at least $600 million.
The company currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
DocuSign (DOCU - Free Report) : The Zacks Consensus Estimate for DocuSign’s fiscal 2024 revenues indicates 9.2% growth from the year-ago figure, while earnings are expected to grow 41.4%. The company beat the consensus estimate in each of the past four quarters, the average surprise being 24.7%.
Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate for Broadridge’s 2024 revenues indicates 7.7% growth from the year-ago figure, while earnings are expected to grow 10.1%. The company beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
BR carries a Zacks Rank #2 (Buy), at present.
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Xerox Holdings (XRX) Gains 5% Despite Unimpressive Q4 Results
Xerox Holdings Corporation (XRX - Free Report) reported lower-than-expected fourth-quarter 2023 results, wherein earnings and revenues declined from the year-ago quarter. Despite the earnings miss, the stock gained 5% since the company’s earnings release on Jan 25.
Adjusted earnings per share (EPS) of 43 cents missed the Zacks Consensus Estimate by 15.7% and decreased 51.7% year over year. Total revenues of $1.77 billion lagged the consensus mark by 1.6% and decreased 9.1% year over year on a reported basis. Revenues declined 7.4% on a constant-currency basis.
Xerox Holdings’ shares have gained 19.2% over the past year, outperforming the 17.6% increase in the industry it belongs to.
Revenue Details
Post-sale revenues were $1.3 billion, down 5.8% from the year-ago quarter’s figure and missing our estimate of $1.35 billion. Equipment sales decreased 17.3% year over year to $458 million, falling short of our estimate of $441.6 million. Equipment sales and post-sale revenues declined 18.3% and 7.5%, respectively, year over year, on a constant currency basis.
Xerox Holdings Corporation Price, Consensus and EPS Surprise
Xerox Holdings Corporation price-consensus-eps-surprise-chart | Xerox Holdings Corporation Quote
The Print and Other segment’s revenues totaled $1.69 billion, down 9.5% year over year. FITTLE’s revenues of $100 million increased 1% from the year-ago reported quarter.
Sales revenues were $721 million, down 15.3% year over year. Services, maintenance and rental revenues tumbled 3.8% year over year to $1 billion. Financing revenues of $44 million fell 13.7% year over year.
Operating Performance
Adjusted operating income amounted to $96 million, up more than 46.1% on a year-over-year basis. Adjusted operating margin was 5.4%, down from the year-ago 9.2%.
Kay Balance Sheet and Cash Flow Figures
XRX exited the quarter with a cash and cash equivalent balance of $519 billion compared with $532 million at the year-ago quarter end. The company’s operating cash flow and free cash flow were $389 million and $379 million, respectively, in the reported quarter.
2024 Guidance
Management expects 2024 revenue growth to be 3-5% on a constant currency basis. Adjusted operating margin is anticipated to be around 7.5%. Free cash flow is forecast to be at least $600 million.
The company currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
DocuSign (DOCU - Free Report) : The Zacks Consensus Estimate for DocuSign’s fiscal 2024 revenues indicates 9.2% growth from the year-ago figure, while earnings are expected to grow 41.4%. The company beat the consensus estimate in each of the past four quarters, the average surprise being 24.7%.
DOCU currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate for Broadridge’s 2024 revenues indicates 7.7% growth from the year-ago figure, while earnings are expected to grow 10.1%. The company beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
BR carries a Zacks Rank #2 (Buy), at present.