Xerox Tumbles But Sees Future Ahead

Xerox Tumbles But Sees Future Ahead

Xerox Holdings Corporation (Xerox) announced its second quarter 2020 (2Q 2020) financial results on 28 July 2020.

The report indicated it had net income of $27 million, or 11 cents a share, in the second quarter, down sharply from $181 million, or 60 cents a share, compared with the same time 12 months ago. Adjusted per-share earnings, that exclude restructuring and related costs and transaction and related costs among others, came to 15 cents, ahead of the FactSet consensus for a loss of 7 cents a share.

According to Actionable Intelligence, a significant reason for Xerox’s ability to maintain positive earnings per share was because it benefitted from US government aid up to US$60 million.

Revenue tumbled to $1.465 billion from $2.263 billion, below the $1.482 billion FactSet consensus. “The global COVID-19 pandemic crisis significantly impacted our second quarter 2020 revenues due to business closures and office building capacity restrictions that impacted our customers’ purchasing decisions and caused lower printing volumes on our devices,” the company said in a statement. Shares were down 0.1% premarket, and have fallen 57% in the year to date.

Some highlights include:

• $34 million of operating cash flow from continuing operations, down $242 million year-over-year, and $15 million of free cash flow, down $245 million year-over-year
• Adjusted operating margin of 4.2 percent, down 820 basis points year-over-year
• $1.47 billion of revenue, a decrease of 35.3 percent year-over-year or 34.6 percent in constant currency
• GAAP earnings per share (EPS) from continuing operations of $0.11 per share, down $0.49 year over-year, and adjusted EPS of $0.15, down $0.64 year-over-year

Xerox Vice Chairman and CEO John Visentin (pictured) said, “I am proud of our employees who did what was necessary during this unprecedented disruption to support our business and clients, especially those delivering essential services.” He went on too explain, “While the bulk of our markets were fully or partially shut down during the quarter, our team’s financial discipline enabled us to deliver positive earnings per share and cash flow while continuing to invest in key areas of growth.”

Visentin reiterated, “No one can control or accurately predict what happens next. We have modelled numerous scenarios to ensure we have the flexibility no matter how the pandemic continues to impact global business.”

The report also included various highlights including:

• the “Make Now Work,” integrated content marketing campaign that demonstrates how Xerox supports clients’ digital transformations and changing needs accelerated by COVID-19;
• the addition of several Fortune 500 and public sector clients;
• healthcare initiatives such as making disposable, low-cost FDA-cleared ventilators and hospital-grade hand sanitizer—an area where the company is doubling production in response to demand.

Related:

• Xerox Claims to Be Resilient Enough to Survive COVID-19

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