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Jun 30, 2020
Xerox Q2 2020 Earnings Report
Xerox's financial performance was impacted by the COVID-19 pandemic but delivered positive EPS and cash flow through financial discipline.
Key Takeaways
Xerox Holdings Corporation announced its second-quarter 2020 financial results, reporting a revenue of $1.47 billion, a GAAP EPS of $0.11, and an adjusted EPS of $0.15. The company's performance was significantly impacted by the COVID-19 pandemic, but financial discipline enabled positive earnings per share and cash flow.
Revenue decreased by 35.3% year-over-year, or 34.6% in constant currency.
GAAP earnings per share (EPS) from continuing operations decreased to $0.11 per share, down $0.49 year-over-year.
Adjusted operating margin decreased to 4.2 percent, down 820 basis points year-over-year.
The company launched 'Make Now Work,' an integrated content marketing campaign to support clients’ digital transformations.
Revenue by Segment
Forward Guidance
Due to the uncertainty caused by COVID-19, Xerox is not providing financial guidance at this time but has modeled numerous recovery scenarios.
Positive Outlook
- Strong balance sheet and sufficient liquidity, including access to an undrawn $1.8 billion revolver.
- More flexible cost structure due to Project Own It transformation.
- Focus on incremental actions to prioritize and preserve cash.
- Majority of business is contractually based with bundled services contracts.
- Expect transactional portion of the business to begin to recover gradually in the second half as businesses reopen.
Challenges Ahead
- The most significant near-term impact from the crisis has been on equipment and unbundled supplies sales.
- Sales are expected to continue to decline significantly as businesses hold off or delay purchases.
- Variable charges are impacted by customers' employees not being in the office and using our equipment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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