Xerox announces lower first-quarter sales
Xerox Holdings Corp. announced first-quarter results, including $1.67 billion of revenue, down 2.5 percent year-over-year and a GAAP (loss) earnings per share (EPS) of $(0.38), down $0.56 year-over-year, and adjusted (loss) per share of $(0.12), down $0.34 year-over-year.
“Revenue was in line with expectations this quarter despite an increasingly volatile operating environment,” said John Visentin, Xerox Vice Chairman and CEO. “Underlying demand for our products and services remains strong, as indicated by our growing backlog and growth in post-sale revenue. Broad-based inflationary pressure and increased logistics costs from supply chain disruption resulted in an operating loss, but we expect to offset most of these cost increases over time with price actions and additional Project Own It savings. We remain focused on executing the strategic roadmap presented at our Investor Day in February and are committed to monetizing our investments in new businesses in ways that maximize shareholder value.”
First-Quarter Key Financial Results
|
(in millions, except per share data) |
Q1 2022 |
Q1 2021 |
B/(W) |
% Change |
|
Revenue |
$1,668 |
$1,710 |
$(42) |
(2.5) % AC |
|
Gross Margin |
31.8% |
35.7% |
(390) bps |
|
|
RD&E % |
4.7% |
4.3% |
(40) bps |
|
|
SAG % |
27.3% |
26.2% |
(110) bps |
|
|
Pre-Tax (Loss) Income |
$(89) |
$53 |
$(142) |
NM |
|
Pre-Tax (Loss) Income Margin |
(5.3)% |
3.1% |
(840) bps |
|
|
Operating (Loss) Income – Adjusted1 |
$(3) |
$89 |
$(92) |
NM |
|
Operating (Loss) Income Margin – Adjusted1 |
(0.2)% |
5.2% |
(540) bps |
|
|
GAAP (Loss) Earnings per Share |
$(0.38) |
$0.18 |
$(0.56) |
NM |
|
(Loss) Earnings Per Share – Adjusted1 |
$(0.12) |
$0.22 |
$(0.34) |
NM |
| ___________ |
| (1) Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures. |
Beginning in the first quarter of 2022, the company made a change to its reportable segments from one reportable segment to two reportable segments – Print and Other, and Financing (FITTLE). The Financing segment reporting is partly the result of the stand-up of this business in 2021.
First-Quarter Segment Results
|
(in millions) |
Q1 2022 |
Q1 2021 |
B/(W) |
% Change |
|
Revenue |
|
|
|
|
|
Print and Other |
$1,550 |
$1,581 |
$(31) |
(2.0)% |
|
Financing (FITTLE) |
158 |
180 |
(22) |
(12.2)% |
|
Intersegment Elimination1 |
(40) |
(51) |
11 |
(21.6)% |
|
Total Revenue |
$1,668 |
$1,710 |
$(42) |
(2.5)% |
|
(Loss) Profit |
|
|
|
|
|
Print and Other |
$(20) |
$71 |
$(91) |
NM |
|
Financing (FITTLE) |
17 |
18 |
(1) |
(5.6)% |
|
Total (Loss) Profit |
$(3) |
$89 |
$(92) |
NM |
| ___________ |
| (1) Reflects net revenue, primarily commissions and other payments, made by the Financing segment (FITTLE) to the Print and Other Segment for the lease of Xerox equipment placements. |
2022 Guidance
Xerox management is maintaining revenue and cash flow guidance for 2022:
- Revenue of at least $7.1 billion in actual currency.
- Free cash flow of at least $400 million.
- Return at least 50% of free cash flow to shareholders.