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Xerox (XRX) Marginally Misses Q1 Earnings, Split by 2016

With operations in more than 180 countries, Xerox Corporation XRX is a leader in the development, manufacture, marketing, servicing and financing of document equipment globally. Headquartered in Norwalk, CT, this century-old firm has helped organizations transform the way they manage their business processes and information.

XRX has beaten earnings estimates in two of the last four quarters, making for an average positive surprise of 3.77%. However, quite like its peers in the document industry, XRX is increasingly grappling with decreased demand for paper-related systems and products. With rising competition gradually weighing on margins, investors have been eagerly waiting for the company’s latest earnings report.

Currently, XRX has a Zacks Rank #3 (Hold), but that could definitely change following its first-quarter 2016 earnings report which was just released.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: XRX misses on earnings. Our consensus called for EPS of 23 cents per share, and the company reported adjusted EPS of 22 cents per share.

Revenue: Revenues beat. XRX posted revenues of $4,281 million, compared to our consensus estimate of $4,273 million.

Key Stats: During the quarter, XRX announced plans to split its BPO business from its Document Technology and DO business. The strategic move will segregate its hardware and services business, with each functioning as an independent, publicly traded company. The process is expected to be completed by year-end 2016. Consequently, XRX is implementing a three-year strategic transformation program for productivity gains and cost reductions across its businesses and expects to realize approximately $700 million in annualized savings in 2016.

Stock Price: Shares prices remained flat in pre-market trading following the earnings beat at the time of writing.

Check back later for our full write up on this XRX earnings report later!

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