Xerox Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Xerox (NYSE:XRX) will unveil its latest earnings on Tuesday, October 23, 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 net income of 25 cents per share, a decline of 3.8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 27 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 25 cents during the last month. For the year, analysts are projecting profit of $1.08 per share, no change from last year.

Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the second quarter, the company reported net income of 26 cents per share versus a mean estimate of profit of 26 cents per share. In the first quarter, the company beat estimates by one cent.

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Stock Price Performance: Between July 24, 2012 and October 17, 2012, the stock price rose 83 cents (12.8%), from $6.49 to $7.32. The stock price saw one of its best stretches over the last year between August 2, 2012 and August 13, 2012, when shares rose for eight straight days, increasing 8.1% (+54 cents) over that span. It saw one of its worst periods between November 15, 2011 and November 23, 2011 when shares fell for seven straight days, dropping 7.4% (-60 cents) over that span.

A Look Back: In the second quarter, profit fell 3.1% to $309 million (22 cents a share) from $319 million (22 cents a share) the year earlier, meeting analyst expectations. Revenue rose 1.7% to $5.54 billion from $5.45 billion.

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.

Key Stats:

After experiencing income drops the past two quarters, the company is hoping to use this earnings announcement to rebound. Net income dropped 4.3% in the first quarter and then again in the second quarter.

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 3.8% in the first quarter before climbing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.49 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.

Wall St. Revenue Expectations: On average, analysts predict $5.51 billion in revenue this quarter, a decline of 1.3% from the year-ago quarter. Analysts are forecasting total revenue of $22.55 billion for the year, a decline of 0.4% from last year’s revenue of $22.63 billion.

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

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