26.10.2015 13:51:02
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Xerox Posts Loss In Q3 On Charges, Plans Review Of Business Portfolio
(RTTNews) - Document technology and business process services provider Xerox Corp. (XRX) Monday reported a net loss for the third quarter, compared to a profit in the previous year, hit by charges related to the Health Enterprise Medicaid platform implementations.
Additionally, the company's Board of Directors authorized a review of its business portfolio and capital allocation options, to enhance shareholder value.
Xerox has been hit hard by the reduction in corporate spend for printing in order to cut costs. Additionally, people have preferred mobile devices over hard copies, which also has reduced demand.
Last week, printer maker and enterprise services provider Lexmark International Inc. (LXK) said its board of directors had authorized the exploration of strategic alternatives to enhance shareholder value.
Lexmark said it believes that a full review of strategic alternatives, beyond the operational and financial actions taken by the company to date, is the next step to unlocking the intrinsic value created by the company.
For Xerox, net loss attributable to the company for the quarter was $34 million or $0.04 per share compared to net income of $266 million or $0.22 per share in the prior year.
Xerox had said previously that its third-quarter results would reflect an after-tax charge of around $240 million related to Health Enterprise Medicaid platform implementations.
Excluding $0.05 per share related to the amortization of intangibles, and $0.23 per share for the previously announced Health Enterprise charge, net income from continuing operations attributable to the company was $0.24 per share, while it totaled $0.26 per share last year.
On average, 10 analysts polled by Thomson Reuters expected the company to report earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude special items.
Total Revenues for the quarter declined 10 percent to $4.33 billion from $4.80 billion last year. Meanwhile, quarterly total adjusted revenue of $4.4 billion was down 4 percent in constant currency. Wall Street expected revenues of $4.54 billion.
Revenue from the company's Services business fell 8 percent to $2.4 billion and Services margin was negative 7.6 percent.
The Document Technology business generated $1.8 billion in revenue, down 12 percent from last year. The segment's margin was 12.8 percent, down 1.2 percentage points.
Further, Xerox said it expects fourth-quarter 2015 GAAP earnings of $0.23 to $0.25 per share and adjusted earnings per share of $0.28 to $0.30 per share. Analysts project fourth-quarter earnings of $0.29 per share.
For full-year 2015, Xerox expects earnings at the low end of $0.46 to $0.52 per share and adjusted earnings per share at the low end of $0.95 to $1.01 per share. Analysts expect annual earnings of $0.95 per share.
In July, the company projected earnings of $0.69 to $0.75 per share and adjusted earnings at the lower end of the $0.95 to $1.01 per share range.
XRX closed up 0.5 percent on Friday at$ 10.34.
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