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Sep 30, 2020
Xerox Q3 2020 Earnings Report
Xerox's earnings and cash flow increased sequentially due to flexibility and financial discipline.
Key Takeaways
Xerox Holdings Corporation announced its third-quarter 2020 financial results, with revenue of $1.77 billion, GAAP EPS of $0.41, and adjusted EPS of $0.48. The company increased earnings and cash flow sequentially, driven by investments in digital solutions and services and is committed to delivering positive cash flow and earnings in the fourth quarter.
Increased earnings and cash flow sequentially.
Grew market share in production in the region Xerox serves and grew share in entry segments in both the Americas and EMEA.
Expanded the company’s software portfolio with the launch of DocuShare® Go.
Honored with several industry awards including "Best Innovation Project of the Year" by Health Tech Digital and named one of the “World's Most Sustainably Managed Companies” by The Wall Street Journal.
Xerox
Xerox
Xerox Revenue by Segment
Revenue by Segment
Equipment Sales Revenue
CapyFin.comPost Sale Revenue
CapyFin.com Forward Guidance
Modeled the impacts on our business of numerous recovery scenarios and expect to deliver positive earnings and free cash flow in the fourth quarter. However, the ongoing resurgence of the virus around the globe, and the impact it is having in forcing new restrictions and lockdowns, leads us to anticipate that our revenues will continue to decline significantly as compared to the prior year, as businesses hold off or delay purchases until there is a more certain path to controlling the pandemic and to economic recovery.
Positive Outlook
- Expect to deliver positive earnings in the fourth quarter.
- Expect to deliver positive free cash flow in the fourth quarter.
- Bundled services contracts include a minimum fixed charge and a significant variable component based on print volumes enabling ramp up and support of customers' needs as businesses resume operations.
- Have a strong balance sheet and sufficient liquidity, including access to our undrawn $1.8 billion revolver.
- Have built a more flexible cost structure through Project Own It transformation and cost savings.
Challenges Ahead
- Ongoing resurgence of the virus around the globe is forcing new restrictions and lockdowns.
- Revenues will continue to decline significantly as compared to the prior year.
- Businesses hold off or delay purchases until there is a more certain path to controlling the pandemic and to economic recovery.
- Most significant impact from the pandemic has been on sales of our equipment and unbundled supplies.
- Variable charges are impacted by our customers' employees not being in the office using our equipment due to lock-downs or capacity restrictions in office buildings.
Revenue & Expenses
Visualization of income flow from segment revenue to net income