Back to top

Image: Bigstock

What's in the Cards for Xerox (XRX) This Earnings Season?

Read MoreHide Full Article

Xerox Corporation’s (XRX - Free Report) upcoming second-quarter 2019 results are likely to reflect year-over-year increase in earnings but decline in revenues.

Shares of the company have gained a massive 73.5% year to date, significantly outperforming the 45% rally of the industry it belongs to.

The Expectations in Detail

The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $2.32 billion, indicating year-over-year decline of 7.5%. The expected decline is likely to be due to lower transactional revenues and decrease in activity in certain areas impacted by the company’s transformational actions. In the first quarter of 2019, revenues of $2.21 billion fell 9.4% on a year-over-year basis.

Xerox has a revenue improvement strategy in place that includes simplification of organizational structure, improving alignment of compensation and expansion of channel presence. Expected results are likely to take time.

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at 93 cents, indicating year-over-year increase of 16.3%. The expected uptick is likely to be driven by "Project Own It," the company’s initiative aimed at increasing productivity and operational efficiency, reducing costs and realigning business to changing market conditions. In the first quarter of 2019, adjusted EPS of $91 increased 33.8%, year over year.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if the companies are witnessing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Xerox has an Earnings ESP of 0.00% and Zacks Rank #3, a combination that makes surprise prediction difficult.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on second-quarter 2019 earnings:

S&P Global (SPGI - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #2.  The company is slated to report results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

IQVIA Holdings (IQV - Free Report) has an Earnings ESP of +1.12% and a Zacks Rank #3. The company is slated to release results on Jul 24.

Fiserv (FISV - Free Report) has an Earnings ESP of +0.79% and a Zacks Rank #3. The company is slated to report results on Jul 25.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


S&P Global Inc. (SPGI) - free report >>

Xerox Corporation (XRX) - free report >>

Fiserv, Inc. (FISV) - free report >>

IQVIA Holdings Inc. (IQV) - free report >>