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Xerox's (XRX) Earnings Miss Estimates in Q1, Decrease Y/Y
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Xerox (XRX - Free Report) reported mixed first-quarter 2020 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same.
Adjusted earnings per share of 21 cents missed the consensus mark by a massive 52.3% and declined year over year. Total revenues of $1.86 billion surpassed the consensus mark by 6% but declined year over year on a reported as well as constant-currency (cc) basis. The coronavirus pandemic had a significant negative impact on the company’s quarterly results.
Shares of the company have depreciated 46% over the past year compared with the 17.1% decline of the industry it belongs to.
Revenues by Segment
Equipment sales totaled $325 million, down 27.5% year over year on a reported basis and 27% at cc. The segment contributed 17% to total revenues.
Post-sale revenues of $1.53 billion declined 11.4% year over year on a reported basis and 10.5% cc. The segment contributed 83% to total revenues.
Revenues by Region
Revenues from the Americas came in at $1.24 billion, down 12.1% year over year on a reported basis and 11.8% at cc. The region contributed 67% to total revenues.
EMEA revenues amounted to $575 million, down 19.2% year over year on a reported basis and 17.6% at cc. The region contributed 31% to total revenues.
Revenues from Other region totaled $46 million compared with the $58 million reported in the year-ago quarter. The region contributed 21% to total revenues.
Operating Performance
Adjusted operating profit of $87 million plummeted 63.6% year over year. Adjusted operating margin shrunk 630 basis points (bps) year over year to 4.7%.
Selling, administrative and general expenses, as a percentage of revenues, declined to 29.1% from the 25.1% reported in the year-ago quarter. Research, development and engineering expenses, as a percentage of revenues, came in at 4.5%, up from the year-ago quarter’s 4.2%.
Balance Sheet and Cash Flow
Xerox exited the first quarter with cash, cash equivalents and restricted cash balance of $2.7 billion compared with the $2.8 billion witnessed at the end of the prior quarter. Long-term debt was $3.2 billion at the end of the March-end quarter.
The company generated $173 million of cash from continuous operations and capex was $23 million in the reported quarter. Free cash flow was $150 million. Xerox paid out $58 million in dividends in the quarter.
Robert Half International Inc. (RHI - Free Report) reported first-quarter 2020 earnings of 79 cents per share that missed the Zacks Consensus Estimate by 2.5% and were down 15% year over year. Revenues of $1.51 billion marginally beat the consensus mark, and increased 3% year over year on a reported basis and 2% on an as-adjusted basis.
Equifax Inc. (EFX - Free Report) came up with first-quarter 2020 adjusted earnings of $1.40 per share that beat the consensus estimate by 8.5% and improved 16% on a year-over-year basis. Revenues of $957.9 million outpaced the consensus estimate by 4.2% and improved 13% year over year on a reported basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) delivered first-quarter 2020 adjusted earnings of 11 cents per share, beating the consensus mark by 22.2%, and being flat year over year. Net revenues of $1.97 billion outpaced the consensus estimate by 1.6% but decreased 16.5% on a year-over-year basis.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Xerox's (XRX) Earnings Miss Estimates in Q1, Decrease Y/Y
Xerox (XRX - Free Report) reported mixed first-quarter 2020 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same.
Adjusted earnings per share of 21 cents missed the consensus mark by a massive 52.3% and declined year over year. Total revenues of $1.86 billion surpassed the consensus mark by 6% but declined year over year on a reported as well as constant-currency (cc) basis. The coronavirus pandemic had a significant negative impact on the company’s quarterly results.
Shares of the company have depreciated 46% over the past year compared with the 17.1% decline of the industry it belongs to.
Revenues by Segment
Equipment sales totaled $325 million, down 27.5% year over year on a reported basis and 27% at cc. The segment contributed 17% to total revenues.
Post-sale revenues of $1.53 billion declined 11.4% year over year on a reported basis and 10.5% cc. The segment contributed 83% to total revenues.
Revenues by Region
Revenues from the Americas came in at $1.24 billion, down 12.1% year over year on a reported basis and 11.8% at cc. The region contributed 67% to total revenues.
EMEA revenues amounted to $575 million, down 19.2% year over year on a reported basis and 17.6% at cc. The region contributed 31% to total revenues.
Revenues from Other region totaled $46 million compared with the $58 million reported in the year-ago quarter. The region contributed 21% to total revenues.
Operating Performance
Adjusted operating profit of $87 million plummeted 63.6% year over year. Adjusted operating margin shrunk 630 basis points (bps) year over year to 4.7%.
Selling, administrative and general expenses, as a percentage of revenues, declined to 29.1% from the 25.1% reported in the year-ago quarter. Research, development and engineering expenses, as a percentage of revenues, came in at 4.5%, up from the year-ago quarter’s 4.2%.
Balance Sheet and Cash Flow
Xerox exited the first quarter with cash, cash equivalents and restricted cash balance of $2.7 billion compared with the $2.8 billion witnessed at the end of the prior quarter. Long-term debt was $3.2 billion at the end of the March-end quarter.
The company generated $173 million of cash from continuous operations and capex was $23 million in the reported quarter. Free cash flow was $150 million. Xerox paid out $58 million in dividends in the quarter.
Xerox currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Robert Half International Inc. (RHI - Free Report) reported first-quarter 2020 earnings of 79 cents per share that missed the Zacks Consensus Estimate by 2.5% and were down 15% year over year. Revenues of $1.51 billion marginally beat the consensus mark, and increased 3% year over year on a reported basis and 2% on an as-adjusted basis.
Equifax Inc. (EFX - Free Report) came up with first-quarter 2020 adjusted earnings of $1.40 per share that beat the consensus estimate by 8.5% and improved 16% on a year-over-year basis. Revenues of $957.9 million outpaced the consensus estimate by 4.2% and improved 13% year over year on a reported basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) delivered first-quarter 2020 adjusted earnings of 11 cents per share, beating the consensus mark by 22.2%, and being flat year over year. Net revenues of $1.97 billion outpaced the consensus estimate by 1.6% but decreased 16.5% on a year-over-year basis.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>