The 10-second takeaway
For the quarter ended June 30 (Q2), Xerox met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share didn't move.
Margins shrank across the board.
Xerox reported revenue of $5.54 billion. The seven analysts polled by S&P Capital IQ predicted revenue of $5.58 billion on the same basis. GAAP reported sales were 1.3% lower than the prior-year quarter's $5.61 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.26. The nine earnings estimates compiled by S&P Capital IQ averaged $0.26 per share. GAAP EPS of $0.22 were the same as the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 32.0%, 140 basis points worse than the prior-year quarter. Operating margin was 8.2%, 60 basis points worse than the prior-year quarter. Net margin was 5.6%, 10 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $5.52 billion. On the bottom line, the average EPS estimate is $0.25.
Next year's average estimate for revenue is $22.65 billion. The average EPS estimate is $1.08.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 547 members out of 622 rating the stock outperform, and 76 members rating it underperform. Among 138 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 121 give Xerox a green thumbs-up, and 17 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Xerox is outperform, with an average price target of $9.00.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.