Xerox reports first-quarter revenue up 2.8 percent
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Xerox Corp. reported first-quarter revenue of $1.72 billion, up 2.8 percent year-over-year or up 5.5 percent in constant currency. The company’s GAAP earnings per share (EPS) was $0.43, up $0.81 year-over-year.
“Demand for our print equipment and related services remains resilient despite continued economic uncertainty, as evidenced by another quarter of growth in both equipment revenue and constant currency post-sale revenue, which included a benefit from prior year acquisitions,” the company said.
“Our team delivered another quarter of strong performance while remaining laser-focused on our three strategic priorities for 2023: client success, profitability, and shareholder returns,” said Steve Bandrowczak, chief executive officer at Xerox. “Despite a challenging macroeconomic climate, demand for our equipment and services remains resilient and is supported by service offerings that help our clients mitigate current macro headwinds like higher inflation, labor shortages, and tighter liquidity conditions. Further, the benefits of a more flexible cost base and ongoing operational efficiencies helped drive improvements in profitability in the first quarter.”
First-Quarter Key Financial Results
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(in millions, except per share data) |
Q1 2023 |
Q1 2022 |
B/(W) YOY |
% Change B/(W) YOY |
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Revenue |
$1,715 |
$1,668 |
$47 |
2.8% AC 5.5% CC (1) |
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Gross Margin |
34.3% |
31.8% |
250 bps |
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RD&E % |
3.7% |
4.7% |
100 bps |
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SAG % |
23.7% |
27.3% |
360 bps |
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Pre-Tax Income (Loss) |
$85 |
$(89) |
$174 |
NM |
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Pre-Tax Income (Loss) Margin |
5.0% |
(5.3)% |
NM |
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Operating Income – Adjusted (1) |
$118 |
$(3) |
$121 |
NM |
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Operating Income Margin – Adjusted (1) |
6.9% |
(0.2)% |
710 bps |
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GAAP Diluted Earnings (Loss) per Share |
$0.43 |
$(0.38) |
$0.81 |
NM |
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Diluted Earnings Per Share – Adjusted (1) |
$0.49 |
$(0.12) |
$0.61 |
NM |
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_____________ |
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(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. |
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First-Quarter Segment Results
|
(in millions) |
Q1 2023 |
|
Q1 2022 |
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B/(W) YOY |
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% Change B/(W) YOY |
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Revenue |
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|
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Print and Other |
$1,613 |
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$1,550 |
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$63 |
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4.1% |
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Financing (FITTLE) |
154 |
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158 |
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(4) |
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(2.5)% |
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Intersegment Elimination (1) |
(52) |
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(40) |
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(12) |
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30.0% |
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Total Revenue |
$1,715 |
|
$1,668 |
|
$47 |
|
2.8% |
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Profit |
|
|
|
|
|
|
|
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Print and Other |
$106 |
|
$(20) |
|
$126 |
|
NM |
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Financing (FITTLE) |
12 |
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17 |
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(5) |
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(29.4)% |
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Total Profit |
$118 |
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$(3) |
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$121 |
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NM |
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_____________ |
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(1) |
Reflects revenue, primarily commissions and other payments, made by the FITTLE segment to the Print and Other segment for the lease of Xerox equipment placements. |
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In other Xerox news, Xerox entered into an agreement to donate its famous PARC subsidiary to SRI International (SRI), a nonprofit research institute. The donation enables Xerox to focus on its core businesses and prioritize growth through its business technology solutions for customers in Print, as well as Digital Services and IT Services, the company said.