NEW YORK (TheStreet) -- Xerox (XRX) - Get Report  reported better-than-expected earnings for the 2016 second quarter and disclosed that it is on track to separate into two companies by the end of the year.

Before the market open, the Norwalk, CT-based company reported adjusted earnings of 30 cents per share, above analysts' estimates of 25 cents per share. Revenue fell 4% year-over-year to $4.39 billion and met analysts' expectations.

For the current quarter, Xerox expects to report adjusted per-share earnings between 26 and 28 cents, while analysts are looking for adjusted earnings of 26 cents per share.

The company reiterated its full-year forecast of adjusted earnings between $1.10 and $1.20 per share vs. analysts' projections of $1.09 per share.

Xerox said it is on track to separate the business into two publicly traded companies by year-end, one of which will be the slower-growing document technology company and the other of which will be the services business.

The company lowered its expected one-time separation costs to between $175 million and $200 million pre-tax from between $200 million and $250 million. It is on track to realize roughly $700 million in annualized savings targeted for 2016.

The stock is flat in pre-market trading after closing at $9.91 on Thursday.

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Xerox's strengths such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

You can view the full analysis from the report here: XRX

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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