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Xerox misses Street expectations for Q1

Shares of Xerox Corp. were down slightly after the company reported first-quarter financial results that missed Street expectations.

Shares of Xerox (NYSE: XRX) were trading midday around $7, down from its Monday close of $7.06.

The company reported, before markets opened, net income attributable to Xerox of $16 million, or 2 cents a share, versus net income of $34 million, or 6 cents a share, during last year’s first quarter.

Adjusted earnings per share for the most recent quarter was 15 cents, which excludes 13 cents per share of after-tax costs related to the amortization of intangibles, restructuring and related costs, certain retirement-related costs, loss on extinguishment of debt and a tax benefit.

During the quarter, the company’s earnings were affected by a charge related to its equity investment in Fuji Xerox, resulting in a 3 cent reduction in earnings per share, the company reported.

Revenues were $2.45 billion in the quarter, down 6.2 percent from $2.62 billion. Post sale revenue dropped 5.8 percent to roughly $1.95 billion, while equipment sales revenue decreased 7.4 percent to $502 million.

Analysts polled by Zacks Investment Research had expected Xerox to report earnings per share of 16 cents on sales of $2.49 billion.

“I am pleased with our operational results in the first quarter,” said Jeff Jacobson, Xerox CEO in a statement, noting revenue and cash flow were in-line with the company’s expectations. “While we still have a lot to do, we laid the foundation to deliver on our full-year commitments.”

Xerox generated operating cash flow of $190 million from continuing operations during the first quarter and ended the period with a cash balance of $1.05 billion. The company returned $87 million in dividends to shareholders and repaid $1.30 billion of debt.

The company reiterated its full-year 2017 guidance of earnings from continuing operations of 44 to 52 cents a share and adjusted earnings per share of 80 to 88 cents a share.

Xerox announced at the start of the year the completion of its separation into two publicly traded companies: Xerox and Conduent Inc. Xerox consists of the company’s document technology business; Conduent is a business process services company.

In Monroe County, Xerox employs some 3,900 workers. That is down from previously reported local employment of 5,500, but a company spokesman said the updated number is due to a change in the way the company is reporting local employment, not in a headcount reduction.

Follow Andrea Deckert on Twitter: @andrea_deckert

(c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-363-7269 or e-mail madams@bridgetowermedia.com.

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