Monday, April 25, 2016
Part of a post that appeared today on The Motley Fool
What: Shares of Xerox Corp. (NYSE:XRX) fell as much as 13.6% Monday after the company announced mixed first-quarter 2016 results and weaker-than-expected guidance.
So what: Quarterly revenue fell 4.2% year over year, to $4.28 billion, notably including a 1% increase in services revenue to $2.5 billion, and a 10% decline in document technology revenue, to $1.6 billion. That translated to a 16.9% decline in adjusted net income, to $231 million, or $0.22 per share. Analysts, on average, were anticipating slightly higher adjusted earnings of $0.23 per share on slightly lower revenue of $4.24 billion.
Recall in late January Xerox unveiled a plan to separate into two independent, publicly traded companies: an $11 billion document technology company, and a $7 billion business process outsourcing company. At the time, Xerox told investors it expected the transition to be complete by the end of this year, along with a transformation program anticipated to deliver $2.4 billion in savings over the next three years to both companies. Xerox confirmed today that the separation is still on track to be complete by the end of this year, and that it has determined the "optimal transaction structure" is a tax-free spinoff of the business process outsourcing segment. As such, Xerox will incur one-time separation costs of roughly $200 million to $250 million this year, as well as total restructuring and related costs of $300 million.
Posted by Joel Salus at 1:52 PM