Xerox Slips To Loss In Q3; Plans Review Of Business Portfolio - Quick Facts

(RTTNews) - Xerox Corp. (XRX) reported a loss in the third-quarter 2015, reflecting charge of $123 million for the write-off of contract receivables and other related assets and liabilities as well as $34 million related to the non-cash impairment of the Enterprise software and deferred contract set-up and transition costs.

The company also announced that its Board of Directors has authorized a review of the company's business portfolio and capital allocation options, with the goal of enhancing shareholder value.

"Xerox's Board of Directors and management team continually review the company's strategy and consider a range of opportunities regarding our businesses and operations with the goal of maximizing value for shareholders," said Ursula Burns, Xerox Chairman and Chief Executive Officer.

Xerox 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 GAAP 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.

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 announced an update regarding the strategic direction of its Government Healthcare Solutions (GHS) business, specifically addressing the implementation of its Health Enterprise (HE) Medicaid platform in California and Montana. As a result of these changes, during third quarter 2015 the company recorded a pre-tax charge (HE charge) of $389 million ($241 million after-tax or 23 cents per share), which included a $116 million reduction to revenues. These developments build on the GHS strategy change previously announced in July 2015.

On an adjusted basis, net income from continuing operations attributable to the company declined to $258 million or $0.24 per share from $306 million, or $0.26 per share last year. 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 to $4.33 billion from $4.80 billion last year. Quarterly total adjusted revenue of $4.4 billion was down 4 percent in constant currency. Annuity revenue was 85 percent of total revenue. Wall Street expected revenues of $4.54 billion.