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Xerox (XRX) to Report Q1 Earnings: How Things Are Shaping Up

Zacks Equity Research

Xerox Corporation XRX is slated to report first-quarter 2019 results on Apr 25, before the bell.

Shares of the company have gained a massive 74.9% year to date, significantly outperforming  the 37.1% rally of the industry it belongs to.

Let’s see how things are shaping up for the announcement.

Revenues to Decline Year Over Year

The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $2.32 billion, reflecting year-over-year decline of 4.7%. The expected decline is likely to be due to weakness in equipment as well as post-sale revenues.

In fourth-quarter 2018, revenues of $2.53 billion fell 7.8% on a year-over-year basis.

Xerox has a revenue improvement strategy in place that includes simplification of organizational structure, improving alignment of compensation and expansion of channel presence. Expected results are likely to take time.

Xerox Corporation Revenue (TTM)


Xerox Corporation Revenue (TTM) | Xerox Corporation Quote


EPS to Register Y/Y Growth

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at 85 cents, indicating year-over-year increase of 25%. The expected uptick is likely to be driven by "Project Own It", the company’s initiative aimed at increasing productivity and operational efficiency, reducing costs and realigning business to changing market conditions.

In fourth-quarter 2018, adjusted EPS of $1.14 increased 11 cents from the year-ago quarter’s tally.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Xerox has an Earnings ESP of 0.00% and a Zacks Rank #3, a combination that makes surprise prediction difficult.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings in first-quarter 2019:

SailPoint Technologies SAIL, with an Earnings ESP of +100.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Total System Services TSS, with an Earnings ESP of +1.44% and a Zacks Rank #3.

EVERTEC EVTC, with an Earnings ESP of +2.74% and a Zacks Rank #3.

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