NORWALK, Conn. - Xerox (NASDAQ:XRX) Holdings Corporation (NASDAQ: XRX) today reported earnings for the first quarter of 2024 that fell short of Wall Street's expectations. In response to the earnings and revenue miss, Xerox shares dropped by 3.71%.
The company posted adjusted earnings per share (EPS) of $0.06, significantly below the analyst consensus of $0.35. Revenue also declined, coming in at $1.5 billion against the expected $1.53 billion.
The company's revenue decreased by 12.4% compared to the same quarter last year, reflecting a downward trend in constant currency terms as well. The GAAP net loss stood at $113 million, or -$0.94 per share, a substantial drop from the prior year's gain of $71 million, or $0.43 per share. Adjusted net income saw a decline of $71 million or $0.43 per share year-over-year, respectively.
Xerox's adjusted operating margin shrank to 2.2%, a decrease of 470 basis points from the previous year. Both operating cash flow and free cash flow experienced significant declines, with operating cash flow down by $157 million and free cash flow lower by $159 million year-over-year.
Steve Bandrowczak, CEO of Xerox, acknowledged the disappointing results but expressed confidence in the company's strategic changes and the team's ability to meet future targets. "While results were below our expectations in Q1, I have full confidence we have the right team and the right strategy to execute Xerox's Reinvention and deliver on our adjusted operating income targets," said Bandrowczak.
Looking ahead, Xerox provided guidance for 2024, projecting a revenue decline of 3% to 5% in constant currency and an adjusted operating margin of at least 7.5%. The company also expects to generate a minimum of $600 million in free cash flow.
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