Xerox Corp. (NYSE: XRX) reported second-quarter 2016 results before markets opened Friday. The business technology firm posted quarterly adjusted diluted earnings per share (EPS) of $0.30 on revenues of $4.4 billion. In the same period a year ago, the company reported EPS of $0.24 on revenues of $4.47 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.25 and $4.39 billion in revenues.
Xerox said it filed its registration statement in June to complete the separation of the company into two businesses, essentially wiping the slate back to 2009 when Xerox acquired business software and services business ACS. The separation is still on track to be completed by the end of this year.
In the first quarter, Xerox said revenue in its Services business decreased by 2% to $2.5 billion (down 1% in constant currency), and service margins rose by 2.4 percentage points to 9.6%. After the separation, this part of the business will be renamed Conduent and trade on its own.
Revenue in the Document Technology business came in at $1.8 billion, down 7% (down 6% in constant currency). Margin ticked up 0.1 point to 12.6%. The part of the business will retain the Xerox name after the separation.
Ursula Burns, who is among the executives on our list of CEOs who have to go, had this to say in the earnings report:
Our Services segment delivered substantial margin expansion and continued revenue growth in Document Outsourcing. Document Technology revenue declines moderated and margin improved driven by cost and productivity initiatives. … We reached critical milestones in both the separation process and strategic transformation program during the second quarter. With each step forward, I become even more optimistic about the future of our businesses and more confident in our ability to meet our targets for the year while creating two companies with the strong strategic and financial foundations they will need to compete in their respective markets.
Xerox expects third-quarter 2016 GAAP earnings of $0.14 to $0.16 per share and adjusted EPS of $0.26 to $0.28 per share. The consensus estimate calls for adjusted EPS of $0.28 on revenue of $4.33 billion.
For full-year 2016, Xerox reiterated guidance for adjusted EPS in a range of $1.10 to $1.20 per share. Analysts are looking for EPS of $1.09 and revenues of $17.53 billion.
Xerox shares closed at $9.91 on Thursday, down about 0.9% for the day and were inactive early Friday morning. The stock’s 52-week range is $8.48 to $11.46. Thomson Reuters had a consensus 12-month price target of $10.85 before this earnings report.
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