NASDAQ$XRX

Xerox Corp · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Xerox's first-quarter results were released, showing a decrease in revenue and earnings per share due to the impact of COVID-19.

Xerox Holdings Corporation reported a decrease in revenue by 14.7 percent year-over-year to $1.86 billion and a GAAP loss from continuing operations of $(0.03) per share. The company withdrew its 2020 financial guidance due to economic uncertainty caused by COVID-19.

  • Operating cash flow from continuing operations was $173 million, down $49 million year-over-year.
  • Free cash flow was $150 million, down $57 million year-over-year.
  • Adjusted operating margin was 4.7 percent, down 630 basis points year-over-year.
  • Adjusted earnings per share (EPS) was $0.21, down $0.45 year-over-year.

Headline financials

Total Revenue

$1.86B

Previous: $2.21B-15.7%
EPS (adj)

$0.21

Previous: $0.91-76.9%
Revenue Growth Constant Currency

-13.9%

No prior period
Capital Expenditures

-$18M

Previous: $9M-300.0%
Free Cash Flow

-$20M

Previous: $217M-109.2%
Net Income

-$2M

Previous: $129M-101.6%
Operating Income

-$597M

No prior period
Gross Profit

-$16M

Previous: $889M-101.8%
Cash & Equivalents

$2.62B

No prior period
Total Assets

$14.8B

No prior period
Stock-Based Comp

$11M

Previous: $15M-26.7%

Revenue & EPS history

Xerox · Revenue · Quarterly

$1.86B

Q1 2020-15.7%vs Q1 2019
Beat estimate in 11 of 16 quarters(69%)
ActualEstimate

Revenue by segment

Xerox · $1.86B total across 2 segments · Q1 2020

  • Post Sale Revenue
    $1.54B-11.4%
  • Equipment Sales
    $325M-27.5%

Forward guidance

The company is withdrawing its 2020 financial guidance for revenue, adjusted operating margin, EPS and free cash flow due to the high level of economic uncertainty and disruption caused by COVID-19.

Tailwinds

  • Strong balance sheet
  • Sufficient liquidity
  • Access to undrawn $1.8 billion revolver
  • Receivables securitization
  • Access to capital markets

Headwinds

  • Greatest impact to revenues from business closures expected during the second quarter.
  • Sales are expected to decline significantly as businesses hold off or delay purchases during the closure period.
  • Variable charges are impacted by our customers' employees not being in the office and using our equipment due to current lock-down restrictions.
  • Uncertainty around the duration and economic impact of the crisis.
  • Difficult to predict the full impact on our business operations and financial performance.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

-0.7%

Avg return

Earnings day

+0.7%

Avg return

5 days after

+1.7%

Avg return

30 days after

50%

32 / 64 earnings

Positive

+39.2%

Q1 2026

Best reaction

-19.9%

Q3 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+39.2%+68.2%+106.4%
Q4 2025-13.0%-6.9%-22.7%
Q3 2025-1.7%-8.5%-26.7%
Q1 2025-1.6%+22.7%+10.9%
Q4 2024-5.8%-12.0%-28.6%
Q3 2024-19.9%-19.4%-11.9%
Q2 2024-6.4%-5.9%-8.4%
Q1 2024-12.4%-14.7%-16.0%
Q4 2023+15.9%+15.9%+12.4%
Q3 2023-10.2%-9.6%+1.1%
Q2 2023+8.3%+2.7%-0.1%
Q1 2023+13.2%+15.3%+2.5%
Q4 2022-3.4%-6.0%-6.5%
Q3 2022-9.0%-9.5%-1.0%
Q2 2022+7.2%+9.9%+15.6%
Q1 2022-13.7%-12.0%-13.5%
Q4 2021-4.1%-2.2%-5.7%
Q3 2021-13.5%-13.5%-1.8%
Q2 2021+3.2%+2.2%-5.4%
Q1 2021-3.9%-3.7%-6.5%
Q4 2020+0.6%+1.3%+22.2%
Q3 2020-8.9%-8.1%+23.6%
Q2 2020+0.3%+5.2%+20.7%
Q1 2020+8.2%-4.4%-5.7%
Q4 2019+4.8%+1.5%-3.5%
Q3 2019+10.8%+8.7%+26.0%
Q2 2019-5.4%-9.9%-15.2%
Q1 2019-4.1%-1.0%-5.3%
Q4 2018+15.9%+17.4%+27.2%
Q3 2018+3.7%+3.7%-4.6%
Q2 2018+3.3%+4.8%+10.6%
Q1 2018-3.4%-3.4%-6.9%
Q4 2017+0.2%-4.0%-8.0%
Q3 2017-7.9%-8.4%-13.9%
Q2 2017+6.1%+5.1%+5.2%
Q1 2017+0.6%+1.8%-1.0%
Q4 2016+1.7%+2.9%+4.9%
Q3 2016+2.1%-0.6%-2.0%
Q2 2016+2.3%+0.3%-1.8%
Q1 2016-12.2%
Q4 2015+2.1%
Q3 2015-10.1%
Q2 2015-1.8%
Q1 2015-11.6%
Q4 2014-1.3%
Q3 2014-3.2%
Q2 2014+2.0%
Q1 2014+4.3%
Q4 2013-9.8%
Q3 2013-9.5%
Q2 2013-1.4%
Q1 2013-2.7%
Q4 2012+7.4%
Q3 2012+0.1%
Q2 2012+0.0%
Q1 2012+0.9%
Q4 2011+3.0%
Q3 2011-8.5%
Q2 2011+4.5%
Q1 2011+2.1%
Q4 2010+2.0%
Q3 2010+2.0%
Q2 2010-4.4%
Q1 2010+3.1%

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