Xerox Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Xerox (NYSE:XRX) will unveil its latest earnings on Friday, July 20, 2012. Xerox engages in the development, manufacturing, marketing, services and finance of document equipment, software, solutions and services worldwide.

Xerox Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 26 cents per share, a decline of 3.7% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate moved up. It has dropped from 27 cents during the last month. Analysts are projecting profit to rise by 2.8% compared to last year’s $1.11.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by one cent, reporting net income of 23 cents per share against a mean estimate of profit of 22 cents per share.

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Stock Price Performance: Between April 19, 2012 and July 16, 2012, the stock price fell 65 cents (-8.2%), from $7.91 to $7.26. The stock price saw one of its best stretches over the last year between October 20, 2011 and October 27, 2011, when shares rose for six straight days, increasing 12.6% (+96 cents) over that span. It saw one of its worst periods between July 21, 2011 and August 2, 2011 when shares fell for nine straight days, dropping 14.4% (-$1.48) over that span.

A Look Back: In the first quarter, profit fell 4.3% to $269 million (19 cents a share) from $281 million (19 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 3.8% to $5.5 billion from $5.3 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.53 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

Key Stats:

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 40.5% in the second quarter of the last fiscal year, 28% in the third quarter of the last fiscal year and more than twofold in the fourth quarter of the last fiscal year before declining in the first quarter.

On the top line, the company is hoping to build on a revenue increase last quarter. Revenue fell 0% in the fourth quarter of the last fiscal year after increasing in the first quarter.

Analyst Ratings: With four analysts rating the stock as a buy, one rating it as a sell and three rating it as a hold, there are indications of a bullish outlook.

Wall St. Revenue Expectations: Analysts predict a decline of 0.2% in revenue from the year-earlier quarter to $5.6 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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