Earnings Up, but Revenue Down for Xerox’s First Quarter

Xerox’s cost-cutting appears to be paying off, as yesterday the company reported results for the first quarter of 2019, reporting net income or $133 million, or 55 cents a share, compared with $23 million, and 8 cents a share, for first-quarter 2018.

However, revenue was $2.2 billion for the quarter, down 9.4 percent year-over-year. Equipment revenue was $0.4 billion, down 10.2 percent year-over-year. Virtually all first-quarter hardware segment installations were down year-over-year, including B&W and color mid-range and high-end systems, and B&W A4. The only segment that saw an increase in installations was the A4 color segment, which was up 10 percent year-over-year.

Xerox Vice Chairman and CEO John Visentin commented: “Our transformation initiatives are yielding results, which give us confidence to raise our full-year earnings guidance despite revenue declines. We are investing in our core business as well as new technologies that create value for our stakeholders and position us for long-term growth.”

The firm said it’s on track to drive gross savings in 2019 of at least $640 million under Project Own It, Xerox’s enterprise-wide initiative to create a simpler, more effective organization, and which includes outsourcing of global administrative and support functions with the help of India-based HCL Technologies.

Full-Year Forecast

Xerox forecasts revenue of $2.2 billion for full-year 2019, down 9.4 percent. However, it’s raising its 2019 guidance for GAAP earnings per share to $2.90 to $3.05. Its previous forecast for EPS was 2.60 to $2.70 and $3.70 to $3.80, respectively.

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