The company also announced that its board has authorized a review of the company’s business portfolio and capital allocation options, with the goal of enhancing shareholder value.
On a GAAP basis, Xerox posted a net loss of $0.04 per share, which includes a charge of $0.05 related to amortization of intangibles and a charge of $0.23 related to a decision not to complete certain projects in the company’s Health Enterprise Medicaid platform.
In the third quarter of 2015, Xerox said revenue in its Services business fell 8% to $2.4 billion (down 4% in constant currency), and service margins were negative 7.6%.
Revenue in the Document Technology business came in at $1.8 billion, down 12% (down 9% in constant currency). Margin fell 1.2% to 12.8%.
The company’s CEO said:
Although we already have taken steps to accelerate cost reductions and prioritize investments to drive improved productivity and higher margins, our Board determined that undertaking a comprehensive review of structural options for the company’s portfolio is the right decision at this time. … During the third quarter, the company achieved adjusted earnings in line with our guidance. We continue to focus on strengthening our offering portfolio, improving productivity and targeting our highest-margin segments.
Xerox expects fourth-quarter 2015 GAAP earnings of $0.23 to $0.25 per share and adjusted EPS of $0.28 to $0.30 per share. The consensus estimate calls for adjusted EPS of $0.29 on revenue of $4.54 billion.
For full-year 2015, Xerox expects GAAP earnings at the low end of $0.46 to $0.52 per share and adjusted EPS at the low end of $0.95 to $1.01 per share.
Xerox also expects full-year 2015 cash flow from operations of $1.6 billion to $1.7 billion and free cash flow from operations of $1.3 billion to $1.4 billion.
Xerox shares closed at $10.34 on Friday, up about 0.5% for the day and were inactive early Monday morning. The stock’s 52-week range is $9.45 to $14.36. Thomson Reuters had a consensus analyst price target of around $12.59 before the report.
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