Xerox earnings: profits beat estimates, revenues a little lighter than expected
Xerox is reporting mixed results for its second quarter earnings released on Tuesday morning.
Xerox is a standalone company now, after it split from the business services side of the corporation earlier this year.
The division based in Rochester mostly revolves around document technology, and in this latest quarter, profits of $166 million came in higher than Wall Street expects on a per share basis, with the company earning .87 per share on an adjusted basis; Wall St. expected around .80 per share.
Revenues of $2.57 billion were a little lighter than analysts anticipated.
CEO Jeff Jacobson says the company is pleased with the strong operating margins and cash flow, which resulted in solid operating results despite sales declines. He says those revenue declines are related to the transition to a portfolio of new products, the ConnectKey products introduced earlier this year.
Company spokesman Carl Langsenkamp told WXXI News that some customers may have held off on purchases.
“It was softer than expected because we saw a lot of customer delays as they transitioned to the new products, but we do expect to see those new equipment purchases flowing through as we move through this quarter, and building into the fourth quarter of next year.”
At Brighton Securities, George Conboy says this quarter looks a lot like some recent quarters. He says Xerox still needs to shore up sales.
“To me it looks like Xerox will need to diversify their revenue base; they’re making equipment and they’re selling services to go with that equipment, but both major forms of business have been down now for some time.”
Xerox now employs about 3,740 people in Rochester, down about 140 from earlier this year, but Langsenkamp says some of that is due to the usual ebb and flow that is part of normal staffing.
The company worldwide headcount is down about 300 compared to the first quarter. Xeox has been working to reduce costs as part of its overall 'strategic transformation' program.
Xerox stock rose nearly 6 percent on Tuesday, gaining $1.79 to close at $32.46