Xerox Earnings: Exceeds Expectations, Stock Pops

Xerox Corp. (NYSE:XRX) delivered a profit and beat Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 1.58%.

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Xerox Corp. Earnings Cheat Sheet

Results: Net income decreased -10.67% to $335 million (26 cents per diluted share) in the quarter versus a net gain of $375 million in the year-earlier quarter.

Revenue: Decreased 0.74% to $5.92 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Xerox Corp. reported adjusted net income of 30 cents per share. By that measure, the company beat the mean analyst estimate of $0.29. It beat the average revenue estimate of $5.88 billion.

Quoting Management:  “Strong growth in services and the consistent profitability of our document technology business generated significant operating cash flow and contributed to fourth-quarter earnings that met our expectations,” said Ursula Burns, Xerox chairman and chief executive officer.  “Throughout 2012, we focused on scaling our services business and adjusting our business model to align with growth opportunities in the $600 billion market we serve…

…Our fourth-quarter results reflect steady progress. We increased our services segment margin by 0.9 points while growing business process outsourcing revenue by 8 percent, IT outsourcing by 15 percent and document outsourcing by 2 percent. In document technology, our fourth-quarter segment margin of 12.3 percent improved, reflecting effective execution in reducing our cost base and maximizing profitability.”

Key Stats:

Revenue increased 9.16% from $5.42 billion in the previous quarter. Net income increased 18.79% from $282 million in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.25 to a profit $0.24. For the current year, the average estimate has moved down from a profit of $1.05 to a profit of $1.02 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)