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Xerox shares soar on positive Q3 earnings report
Xerox shares soar on positive Q3 earnings report
Listen to this articleXerox Holdings Corp. shares spiked Tuesday on earnings that surpassed Street estimates. Company stock (NYSE: XRX) had climbed 16 percent to $35.72 in heavy volume midday, eventually settling at roughly $34.50.
Despite a 6.5 percent decrease in revenue to $2.2 billion in the quarter, sales beat analyst estimates by $10 million in the third quarter ended Sept. 30. Net income for the quarter was $222 million, up from $93 million in the third quarter of 2018.
GAAP earnings for the quarter were 96 cents, up from 34 cents in the year-ago quarter. Adjusted earnings were $1.08, compared with 85 cents a year ago, beating Street estimates by 21 cents.
“Our strategy and execution delivered a strong third quarter despite industry headwinds,” Xerox Vice Chairman and CEO John Visentin said in a statement. “We increased cash flow, earnings per share and adjusted operating margin while we improved the revenue trend. These results give us confidence to raise our earnings and cash flow guidance for the year as we position Xerox for long-term growth.”
Xerox now expects fiscal 2019 revenue of $9.05 billion, with GAAP earnings of $3.10 to $3.20. Adjusted earnings are expected to be $4 to $4.10 per share. The company is expecting free cash flow of $1.1 billion to $1.2 billion.
Xerox officials said the company is on track to drive 2019 gross savings of $540 million or more under Project Own It, Xerox’s enterprise-wide initiative to simplify operations, drive continuous improvement and free up capital to reinvest in the business.
Third-quarter Project Own It restructuring and related costs totaled $27 million, compared with $29 million in the same quarter last year. Worldwide employment was 27,600 at the end of the third quarter, down 4,800 from Dec. 31, 2018, officials said.
Xerox in May received shareholder approval to reorganize as a wholly-owned subsidiary of a new holding company. The company announced plans for the reorganization in March.
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