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Why Xerox (XRX) Is Down Today

NEW YORK (TheStreet) -- Xerox  (XRX) was falling 3.27% to $11.38 on Friday afternoon after the company reported its fourth-quarter results during the pre-market period on Friday. The stock hit a low of $11.21 for the day as of 2:30 p.m.

Xerox reported adjusted fourth-quarter earnings of 29 cents a share and revenue of $5.6 billion, down from 30 cents a share and $5.9 billion in the same period one year ago; however, those figures aligned with analyst estimates for the most recent quarter. The company also reported income of $306 million, or 24 cents a share, down from $335 million, or 26 cents, year-over-year.

Xerox also forecast guidance for non-GAAP earnings in the first quarter in a range of 23 cents to 25 cents a share, which also fell in line with analyst estimates.

"We managed anticipated headwinds while continuing to build our business by investing in growth markets, such as healthcare and graphic communications, and expanding services internationally," said Chairman and CEO Ursula Burns in a company statement. "Looking ahead, we're focused on evolving our portfolio and implementing our cost initiatives to improve both revenue and margins."

TheStreet Ratings team rates XEROX CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate XEROX CORP (XRX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations, notable return on equity, increase in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 64.11% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, XRX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 61.78% to $961.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 45.02%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Office Electronics industry and the overall market on the basis of return on equity, XEROX CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the Office Electronics industry average, but is less than that of the S&P 500. The net income increased by 1.4% when compared to the same quarter one year prior, going from $282.00 million to $286.00 million.
  • Despite the weak revenue results, XRX has outperformed against the industry average of 14.0%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: XRX Ratings Report

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