Xerox Holdings(US:XRX) ZACKSยท2024-11-28 17:35Core Viewpoint - Xerox Holdings Corporation reported disappointing third-quarter 2024 results, with both earnings and revenues missing consensus estimates, leading to a downward revision of future guidance [2][8]. Financial Performance - Third-quarter adjusted EPS was 25 cents, missing the Zacks Consensus Estimate by 52.8% and declining 45.7% year over year [2]. - Total revenues were $1.53 billion, missing the consensus mark by 3.6% and decreasing 7.5% year over year [2]. - Post-sale revenues were $1.19 billion, down 6.1% year over year, and equipment sales declined 12.2% to $339 million [3]. - The Print and Other segment's revenues totaled $1.46 billion, down 7.5% year over year [4]. - Sales revenues were $588 million, down 8.7% year over year, while services, maintenance, and rental revenues totaled $902 million, down 6.2% [5]. Operating Performance - Adjusted operating income was $85 million, up 17.6% year over year, with an adjusted operating margin of 5.2%, up 110 basis points [6]. Balance Sheet and Cash Flow - Xerox ended the quarter with cash and cash equivalents of $521 million, an increase from $485 million in the prior quarter [7]. - Operating cash flow was $116 million, and free cash flow was $107 million for the quarter [7]. 2024 Guidance - The company lowered its 2024 revenue guidance from a 5% to 6% decline to around a 10% decline at constant currency [8]. - Adjusted operating margin expectations were reduced from at least 6.5% to around 5% [8]. - Free cash flow expectations were revised down to $450 to $500 million from at least $550 million [8]. Market Sentiment - Estimates for Xerox have trended downward, with a consensus estimate shift of -37.2% [9][10]. - The stock has a Growth Score of B but lags in Momentum Score with an F, while holding an A grade on the value side [11]. - Overall, the stock has an aggregate VGM Score of B, indicating a below-average return expectation in the coming months, reflected in a Zacks Rank 5 (Strong Sell) [12].