Why Is Xerox (XRX) Down 19.6% Since Last Earnings Report?

Core Viewpoint - Xerox Holdings Corporation reported mixed fourth-quarter 2024 results, with earnings missing estimates while revenues exceeded expectations, indicating potential challenges ahead for the company [2][12]. Financial Performance - Fourth-quarter adjusted EPS was 36 cents, missing the Zacks Consensus Estimate by 30.8% and declining 16.3% year over year [2]. - Total revenues for the quarter were $1.5 billion, surpassing the consensus mark by 1.5% but decreasing 8.6% year over year [2]. - Post-sale revenues were $1.22 billion, down 6.7% year over year, while equipment sales declined 14.2% to $393 million [3]. - The Print and Other segment's revenues totaled $1.54 billion, down 8.7% year over year [4]. - Sales revenues were $656 million, down 9% year over year, and services, maintenance, and rental revenues totaled $924 million, down 7.6% [5]. Operating Performance - Adjusted operating income was $104 million, reflecting a year-over-year increase of 6.4%, with an adjusted operating margin of 6.4%, up 100 basis points year over year [6]. Balance Sheet and Cash Flow - Xerox ended the quarter with cash and cash equivalents of $576 million, up from $521 million in the prior quarter [7]. - Operating cash flow and free cash flow were reported at $351 million and $334 million, respectively [7]. Future Guidance - The company expects low single-digit revenue growth at constant currency and an adjusted operating margin of at least 5% [8]. - Free cash flow is anticipated to be between $350 million and $400 million [8]. Estimate Trends - Recent estimates have trended downward, with the consensus estimate shifting by -63.64% [9]. - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of below-average returns in the coming months [12]. VGM Scores - Xerox has a strong Growth Score of A and a Value Score of A, but is lagging in Momentum Score with a B, resulting in an aggregate VGM Score of A [10][11].