Xerox Holdings Corporation’s XRX stock has declined 8.7% since the company’s second-quarter 2024 results. This downward trajectory can be attributed to dismal quarterly performance and weak guidance.
Second quarter adjusted EPS of 29 cents missed the Zacks Consensus Estimate by 37% and declined 34% year over year. Total revenues of $1.58 billion missed the consensus mark by 3.1% and decreased 10% year over year on a reported basis. Revenues declined 9.6% on a constant-currency (CC) basis.
Xerox lowered its 2024 revenue guidance from a decline of 3% to 5% to a decline of 5% to 6% at constant currency. Adjusted operating margin expectation has been lowered from at least 7.5% to at least 6.5%. The company now expects free cash flow to be at least $550 million compared with the previous anticipation of at least $600 million.
Xerox Holdings Corporation Price, Consensus and EPS Surprise 
Xerox Holdings Corporation price-consensus-eps-surprise-chart | Xerox Holdings Corporation Quote
Q2 Revenue Details
Post-sale revenues came in at $1.22 billion, down 8.4% year over year on a reported basis and 7.9% on a constant currency (cc) basis, lagging our estimate of $1.24 billion. Equipment sales declined 15.2% year over year on a reported basis and 14.9% at cc to $356 million, lagging our estimate of $391.7 million.
Print and Other segment’s revenues totaled $1.51 billion, down 9.9% year over year, lagging our estimate of $1.55 billion. Xerox Financial Services revenues totaled $89 million, down 11.9% year over year, and lagged our estimate of $99.9 million.
Sales revenues totaled $611 million, down 12.2% year over year on a reported basis and 12% at cc. Services, maintenance and rental revenues totaled $929 million, down 7.9% year over year on a reported basis and 7.3% at cc. Financing revenues of $38 million decreased 22.4% year over year on a reported basis and 20.2% at cc.
Operating Performance
Adjusted operating income came in at $85 million, down 20.6% on a year-over-year basis. Adjusted operating margin came in at 5.4%, down 70 basis points year over year.
Kay Balance Sheet and Cash Flow Figures
Xerox exited the quarter with a cash and cash equivalent balance of $485 billion compared with $685 million at the end of the prior quarter. The company’s operating cash flow and free cash flow were $123 million and $115 million, respectively, in the quarter.
XRX currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots
Omnicom OMC reported impressive second-quarter 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.
OMC’s earnings of $1.95 per share beat the consensus estimate by 3.7% and increased 7.7% year over year. Total revenues of $3.9 billion surpassed the consensus estimate by 1.1% and increased 6.8% year over year.
Equifax EFX reported better-than-expected second-quarter 2024 results.
EFX’s adjusted earnings were $1.82 per share, beating the consensus estimate by 5.8% and increasing 6.4% from the year-ago quarter. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but increased 8.6% from the year-ago quarter.
ManpowerGroup MAN reported mixed second-quarter 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Quarterly adjusted earnings of $1.3 per share surpassed the consensus mark by 2.4% but declined 17.7% year over year. Revenues of $4.5 billion lagged the consensus mark by a slight margin and dipped 6.9% year over year.
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