Xerox Announces Q2 2010 Financial Results
Jul 22, 2010
Xerox Corporation announced its second-quarter 2010 results that include adjusted earnings per share of 24 cents and $678 million in operating cash flow. Adjusted EPS excludes 8 cents from restructuring charges and amortization of intangibles as well as acquisition-related and litigation costs, resulting in GAAP EPS of 16 cents.
Second-quarter revenue of $5.5 billion was up 48%, including a 1 point negative impact from currency. On a pro-forma basis, with ACS in the company’s 2009 results, total revenue grew 2% or 3% in constant currency. Revenue from technology, which represents the sale of document systems as well as the supplies, technical service, and financing of products, was up 3% or 4% in constant currency. Total install activity for Xerox equipment was up 45%, reflecting strong demand across all segments including a 56% increase in entry-level printers and multifunction devices. Revenue from services was up 1% on a pro-forma basis, and represents the company’s business process, IT, and document outsourcing offerings.
In February, Xerox closed on its acquisition of business process and IT outsourcing firm, Affiliated Computer Services (ACS). The resulting joint sales activities between Xerox and ACS as well as increased interest in the company’s diverse portfolio of outsourcing offerings led to a significant second-quarter increase in the pipeline for services contracts.
Second-quarter gross margin was 34.8%, and selling, administrative, and general expenses were 21.1% of revenue. On a pro-forma basis, operating margin of 10.1% was up nearly one point, driven by improvements in gross margin and SAG as a percent of revenue.
The $678 million in second-quarter operating cash flow contributed to $1.1 billion in cash flow for the first half of the year. The company reiterated its expectations to deliver $2.6 billion in operating cash for the full year.
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