Xerox Beats Up on Analysts Yet Again

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Xerox (NYS: XRX) reported earnings on Jan. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Xerox met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged, and earnings per share increased significantly.

Gross margins shrank, operating margins contracted, and net margins improved.

Revenue details
Xerox chalked up revenue of $6.0 billion. The six analysts polled by S&P Capital IQ foresaw a top line of $6.0 billion. Sales were 0.2% lower than the prior-year quarter's $6.0 billion

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.33. The nine earnings estimates compiled by S&P Capital IQ predicted $0.33 per share on the same basis. GAAP EPS of $0.26 for Q4 were 139% higher than the prior-year quarter's $0.11 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 33.2%, 40 basis points worse than the prior-year quarter. Operating margin was 8.6%, 30 basis points worse than the prior-year quarter. Net margin was 6.3%, 340 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $5.5 billion. On the bottom line, the average EPS estimate is $0.24.

Next year's average estimate for revenue is $23.1 billion. The average EPS estimate is $1.16.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Xerox is outperform, with an average price target of $9.78.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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