Revenues Down, but Net Income up for Xerox’s Third Quarter

Xerox today reported results for its third quarter, including revenue of $4.2 billion, down almost 3 percent versus the third quarter a year ago, marking the seventh straight quarter of revenue decline, with sales of  printers and copier/MFPs continuing to fall. On the bright side, the firm reported net income of $181 million, or 17 cents per share, compared with a net loss of $34 million, or 4 cents per share, a year earlier.

Revenue for Xerox’s Document Technology group (printers and copier/MFPs their related supplies and solutions, and document outsourcing) was $1.6 billion, down 9 percent versus third-quarter 2015. Xerox says Document Technology margin remained strong at 13.1 percent, down 0.8 percentage points year-over-year, but up 0.5 percentage points sequentially, reflecting “continued productivity gains and cost savings from the company’s strategic transformation program.”

Xerox generated cash flow from operations of $370 million during the third quarter, up from $271 million in the same quarter last year. The company ended the quarter with a cash balance of $1.4 billion.

It also reported that it remains on progress for its planned separation into two companies by the end of this year.

Forecast

Xerox expects earnings of 11 to 14 cents per share for its upcoming fourth quarter. The company narrowed its full-year guidance for earnings per share to 45 to 48 cents per share and for full-year adjusted earnings per share to $1.11 to $1.14. It continues to expect full-year 2016 cash flow from operations of $950 million to $1.2 billion, and free cash flow of $600 to $850 million.

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