Xerox (XRX) To Report Q1 Earnings: What's In The Cards?

Xerox Corporation (NYSE:XRX) is expected to report first-quarter 2018 results on Apr 24.

While we expect decreasing demand for paper-related systems and unfavorable foreign currency movements to weigh on Xerox’s top-line growth, the bottom line is anticipated to be driven by encouraging performance of new products and strategic business investments.

We observe that shares of Xerox have rallied 9.6% in the past year, outperforming the industry’s gain of 3.9%.

Top Line Likely to Decline Year Over Year

The Zacks Consensus Estimate for revenues in the to-be-reported quarter stands at $2,386 million, reflecting year-over-year decline of 2.8%.

The expected decline is likely to be due to lower demand for paper-related systems and products, and unfavorable foreign currency movements.

Advancements in IT have replaced the traditional means of sending and storing information by digital media. As a result, Xerox is grappling with lower demand for its products, while its attempts to leverage the business process outsourcing market have failed to bolster growth.

In fourth-quarter 2017, revenues rose 0.5% from the year-ago quarter to $2,747 million. However, it declined 2% on a constant currency basis.

New Products, Strategic Investments to Boost Bottom Line

The Zacks Consensus Estimate for earnings per share in the to-be-reported quarter is pegged at 70 cents, indicating year-over-year growth of 16.7%. The year-over-year increase in the bottom line is expected to be driven by successful product launch and strategic business investments.

In fourth-quarter 2017, earnings grew 3.8% from the year-ago quarter to $1.04 per share.

Our Model Doesn’t Suggest a Beat

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

Stocks to Consider

Here are some stocks from the broader 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 2018:

Mastercard Incorporated (NYSE:MA) has an Earnings ESP of +1.38% and a Zacks Rank #2. The company is slated to report quarterly numbers on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Brink’s Company (NYSE:BCO) has an Earnings ESP of +5.25% and a Zacks Rank #2. The company is slated to report quarterly results on Apr 25.

FLEETCOR Technologies, Inc. (NYSE:FLT) has an Earnings ESP of +0.37% and a Zacks Rank #2. The company is expected to report quarterly numbers on May 7.

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