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Shares of Xerox Holdings Corp. rose 2.4% in premarket trades Tuesday after the printer and copy-machines maker swung to third-quarter profit.
Xerox’s
XRX,
net income rose to $49 million, or 28 cents a share, after a loss of $383 million, or $2.48, in the prior year’s quarter. On an adjusted basis, Xerox earned 46 cents a share, up from 19 cents a share in the same period last year, and above analysts’ estimate of 35 cents a share.
Related: Xerox to buy back stock owned by Carl Icahn for $542 million
The company’s revenue was $1.652 billion, down from $1.751 billion in the prior year’s quarter. Analysts were looking for revenue of $1.731 billion. Xerox’s free cash was flow was $112 million, up $130 million year-over-year. “Growth in adjusted profit, EPS and free cash flow reflects solid execution of our strategic priorities amid a challenging macro backdrop,” said Xerox CEO Steve Bandrowczak, in a statement.
Xerox forecast 2023 revenue to be flat to down low-single-digits in constant currency and free cash flow to be at least $600 million. The company also announced a Reinvention effort, which it says will drive sustainable profit improvement and revenue growth. Xerox will continue simplifying and focusing its operations, according to Bandrowczak. The company said that the Reinvention is expected to deliver improvement in adjusted operating income of at least $300 million by 2026.
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Xerox’s stock has fallen 7.7% in 2023, compared with the S&P 500 index’s
SPX,
gain of 9.8%.
Of seven analysts surveyed by FactSet, three have a hold rating and four have an underweight or sell rating for Xerox.
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