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Xerox (XRX) to Report Q4 Earnings: What's in the Cards?

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Xerox Corporation (XRX - Free Report) is slated to report fourth-quarter 2018 results on Jan 29, before the bell.

Shares of the company have declined 4.6% in the past year compared with the 26.2% decline of the industry.

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

Revenues to Decline Year Over Year

The Zacks Consensus Estimate for Xerox’s fourth-quarter revenues is pegged at $2.63 billion, reflecting year-over-year decline of 4.2%. The expected decline is likely to be due to continued weakness in post-sale revenues that are dependent on machine sales and page volume.

In third-quarter 2018, revenues totaled $2.35 billion that fell 5.8% 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.

EPS to Register Y/Y Growth

The Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) is pegged at $1.16, indicating year-over-year increase of 11.5%. The expected uptick is likely to be driven by benefits of cost savings and productivity improvements.

In the last reported quarter, adjusted EPS of 85 cents declined 4 cents from the year-ago quarter’s tally.

Xerox Corporation Price and EPS Surprise

 

 

Our Model Doesn’t Suggest a Beat

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:

Booz Allen Hamilton (BAH - Free Report) has an Earnings ESP of +4.22% and a Zacks Rank #2. The company is slated to release third-quarter fiscal 2019 results on Feb 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

First Data has an Earnings ESP of +6.29% and a Zacks Rank #3. The company is scheduled to release third-quarter 2018 results on Feb 7.

IQVIA Holdings (IQV - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #3. The company is expected to report third-quarter 2018 results on Feb 13.

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