Revenue Down but Net Income up for Xerox’s Second Quarter

Xerox today announced results for its second quarter, reporting net revenue of $2.3 billion, down 8.8 percent year-over-year, while net income was $181 million, or 77 cents a share, versus $112 million, or 42 cents a share, for second-quarter 2018. Operating income was $290 million, up 5 percent year-over-year.

Xerox reported $313 million of operating cash flow, up $78 million year-over-year, and $297 million of free cash flow, up $94 million year-over-year.

Equipment-Revenue Breakdown

Equipment revenue for the second quarter was $504 million, down 9.0 percent year-over-year, while post-sale revenue was $1,785 million, down 6.6 percent year-over-year.

Revenue generated by Xerox Services group was $853 million, down 4.1 percent year-over-year.

Year-over-year, revenue was down 6.5 percent in the Americas, 7.1 percent in EMEA (Europe, Middle-East, Africa), and 22.2 percent in Xerox’s Other region.

Second-quarter year-over-year installation rates were as follows:

  • Entry-Level A4 Models: color installs down 12 percent; B/W installs up 1 percent.
  • Mid-Range Models: color installs down 12 percent; B/W installs down 9 percent.
  • High-End: color installs up 1 percent; B/W installs down 33 percent.

Project Own It Savings

Xerox stated that its Project Own It cost-cutting program contributed some $640 million of savings thus far in 2019. Savings were derived from cost-cutting involving: shared services centers; IT; supply chain; organizational design and benefits costs; procurement; delivery; and real estate.

Forecast

Xerox reduced its revenue forecast by 6 percent, but is maintaining its full-year guidance for EPS, adjusted operating margin, and free cash flow. It’s forecasting EPS in the range of $2.90 to $3.05.

The company says it will continue to “increase revenue-generating investments” and continue its Project Own It campaign to “deliver large-scale transformation and sustainable growth.”

The company also reported that it had completed $300 million of share repurchases year-to-date, and expects at least $600 million in total for the year.

Visit Xerox here for a presentation of second-quarter 2019 results.

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