Xerox sees sharp drop in quarterly profits and sales, but earnings top expectations
Xerox is out with its second-quarter earnings report and the numbers show, like many other companies, Xerox is feeling the impact of the COVID-19 pandemic.
Both profits and sales for the quarter are down sharply from the same period a year earlier. Revenues dropped about 35%, and earnings of around $27 million are much lower than the $181 million the company earned a year ago.
The adjusted earnings of 15 cents per share topped Wall Street estimates, but sales came in a little less than analysts had projected.
Many businesses and offices have been closed during the pandemic and that has a big impact on sales of equipment and supplies. Xerox CEO John Visentin said he is proud of employees who have been doing what is needed to support the business and its clients, especially those delivering essential services.
Visentin said that Xerox has "modeled numerous scenarios to ensure we have flexibility no matter how the pandemic continues to impact global business.”
Brighton Securities Chairman George Conboy said Xerox, like a lot of large companies, is facing big challenges during this pandemic.
“The specific challenge for Xerox will be if more people continue to work from home will you need the amount of documents on paper?" said Conboy. "The answer clearly seems to be, no you won’t.”
Conboy said that while Xerox has the capability for handling remote documents and sharing documents electronically, that is a competitive business with small profit margins.
Visentin said the company does have a strong balance sheet, and although Xerox did see some signs of recovery in June, the company still expect a slower pace of recovery in the second half of the year.