The OEM released the earnings statement for the first quarter of 2017. Q1 revenues down 6.2% and takes a “a charge related to its equity investment in Fuji Xerox”.
Results breakdown:
- GAAP EPS from continuing operations of 2 cents, adjusted EPS of 15 cents; includes 3 cent charge related to Fuji Xerox matter
- Total revenue of $2.45 billion (€2.25 billion/£1.90 billion), down 6.2% or 4.3% in constant currency year-over-year
- Adjusted operating margin of 11.4 percent, up 0.9 points year-over-year
- Operating cash flow of $190 million from continuing operations, up $103 million from the same period in 2016
- Announced largest product launch in company’s history, delivering new technology to transform the workplace
Jeff Jacobson, Xerox chief executive officer, said, “I am pleased with our operational results in the first quarter,” and “Revenue and cash flow were in-line with our expectations and, despite currency headwinds, operating margin expanded driven by productivity savings from our Strategic Transformation initiatives.
Fuji Xerox is an unconsolidated entity in which Xerox owns a 25 percent interest and Fujifilm Holdings Corporation (Fujifilm) owns a 75 percent interest. On April 20, 2017, Fujifilm announced it is conducting a review of the accounting at Fuji Xerox’s New Zealand subsidiary related to the recovery of receivables associated with certain leasing transactions that occurred in, or prior to, Fuji Xerox’s fiscal year ending March 31, 2016. The Fujifilm review is ongoing and a charge of approximately $30 million in the first quarter of 2017 represents Xerox’s share of the current Fujifilm estimated adjustments from this review.
Full Year 2017 Guidance
The company reiterated its full-year 2017 guidance of GAAP earnings from continuing operations of 44 to 52 cents per share and adjusted EPS of 80 to 88 cents per share.