) reported net income from continuing operations of $288 million
or 22 cents per share in the third quarter of 2013 compared with
$280 million or 21 cents a share in the year-ago quarter.
Excluding non-recurring items, adjusted earnings in the reported
quarter were $340 million or 26 cents per share versus $331
million or 25 cents per share in the year-earlier quarter. The
adjusted earnings beat the Zacks Consensus Estimate by a penny.
Revenues in the quarter were flat year over year at $5,262
million, missing the Zacks Consensus Estimate of $5,333 million.
Operating margin was up 0.5% to 9.4% and gross margin remained
flat year on year at 31.5%.
Revenues from the
segment, which include Document Outsourcing (DO), Business
Process Outsourcing (BPO) and Information Technology Outsourcing
(ITO), rose 3% to $2.9 billion in the reported quarter, driven by
higher revenues from all three subdivisions.
Segment margin increased 0.5% year over year in the reported
quarter. Total Services sales pipeline grew 5% year over year.
Total contract value of deal signings aggregated $2.9 billion
with BPO, DO and ITO accounting for $1.8 billion, $860 million
and $260 million, respectively.
Revenues in the
segment dipped 4% year over year to $2.2 billion, including a 1%
positive impact from currency. The decline was attributable to a
fall in equipment sales and annuity revenues.
Segment margin increased 1.3% year over year in the reported
Revenues in the
segment went down 6% to $159.0 million (including 2% positive
impact from currency). Lower revenues in its wide format business
and lower paper sales within developing markets resulted in the
Xerox had cash and cash equivalents of $948.0 million at
quarter-end, compared with $882.0 million in the year-ago period.
Total debt at quarter-end stood at $7.5 billion versus $8.5
billion as of Dec 31, 2012.
Net cash used in operating activities in the reported quarter
were $961 million versus $594 million in the year-ago period.
For fourth quarter 2013, Xerox expects GAAP earnings between 24
cents and 26 cents per share, while adjusted earnings are
expected to be within 28 cents to 30 cents.
For full year 2013, Xerox expects GAAP earnings guidance in
the range of 93 cents to 95 cents and expects adjusted earnings
between $1.08 and $1.10. The company expects operating cash flow
to range from $2.1 billion to $2.4 billion in 2013.
NITTO DENKO CP (NDEKY): Get Free Report
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Xerox forecasts continued demand from small and midsize
businesses in the United States and positive trends in the high
end of its business going forward.
Xerox currently has a Zacks Rank #3 (Hold). Other stocks that
look promising and are worth a look in the industry include
Nitto Denko Corp.
), which carries a Zacks Rank #1 (Strong Buy), and
Ricoh Company, Ltd.
), both carrying a Zacks Rank #2 (Buy).