Shares of Xerox (NYSE:XRX) have popped today, up by 11% as of 1 p.m. EDT, after the digital printing company reported third-quarter earnings results. Investors cheered that Xerox boosted its full-year 2019 forecast.
Revenue in the third quarter declined 6.5% to $2.2 billion, slightly ahead of the $2.19 billion in sales that analysts were modeling for. On a constant currency basis, the top line only fell 5.3%. That translated into adjusted earnings per share of $1.08, easily beating the consensus estimate of $0.86 per share in adjusted profits. Operating cash flow improved to $356 million while free cash flow increased to $339 million.
Xerox said it remains on track to realize gross savings of $640 million for 2019 under its ongoing "Project Own It" initiative. The company has also decided not to sell its financing segment, a move it had been exploring since March.
In a statement, CEO John Visentin said:
Our strategy and execution delivered a strong third quarter despite industry headwinds. We increased cash flow, earnings per share and adjusted operating margin while we improved the revenue trend. These results give us confidence to raise our earnings and cash flow guidance for the year as we position Xerox for long-term growth.
Xerox is raising its outlook for 2019 EPS, which is now expected in the range of $3.10 to $3.20 as reported under generally accepted accounting principles (GAAP). Adjusted earnings per share for the year should be $4.00 to $4.10, and operating cash flow is forecast at $1.2 billion to $1.3 billion.