Xerox Q2 Profit Meets View, Sees FY Adj. EPS At Lower End Of Outlook

(RTTNews) - Document technology and business process services provider Xerox Corp. (XRX) Friday said its second-quarter profit declined from the prior year, amid revenue drop, but matched Wall Street estimates. For the full year, the company expects adjusted earnings at the lower end of the previous outlook range.

Attributable net income plunged to $12 million from $266 million in the previous year. Earnings per share dropped to $0.01 from $0.22.

Net income from continuing operations declined to $107 million or $0.09 per share from $255 million or $0.21 per share a year ago. The latest results included $0.05 related to the amortization of intangibles and $0.08 for non-cash software impairment charges.

Adjusted earnings per share were $0.22 for the quarter, while it totaled $0.25 last year. On average, ten analysts polled by Thomson Reuters expected the company to report earnings per share of $0.22 for the quarter. Analysts' estimates typically exclude special items.

Total revenue fell 7 percent to $4.59 billion from $4.94 billion. Analysts expected revenue of $4.64 billion for the quarter.

Revenue from the company's Services business, which represented 56 percent of total revenue, slid 3 percent to $2.6 billion, but grew 1 percent in constant currency. Services margin slipped 1 percentage point to 7.5 percent.

The Document Technology business generated $1.9 billion in the quarter, a decline of 12 percent from last year. Document Technology margin was down 2.3 percentage points at 12.1 percent.

Ursula Burns , Xerox chairman and CEO, said, "We delivered adjusted earnings in line with our guidance, met our Services and Document Technology margin expectations and delivered solid operating cash flow of $349 million in the quarter."

Looking ahead, Xerox expects third-quarter earnings in the range of $0.17 to $0.19 per share. Adjusted earnings are expected to be between $0.22 and $0.24 per share. Analysts expect the company to report earnings per share of $0.25.

For full-year 2015, Xerox expects earnings of $0.69 to $0.75 per share and adjusted earnings at the lower end of the $0.95 to $1.01 per share range. Analysts expect the company to report earnings per share of $0.98.

Xerox said it is adjusting 2015 capital allocation plans, increasing share repurchases by $300 million to $1.3 billion and reducing acquisition investments.

XRX closed up 1 percent on Thursday at $10.81, and slipped 1.9 percent in pre-market activity.