Economy

Xerox shares fall as annual revenue declines, cash flow forecasts take a beating By Stocksak


© Stocksak. FILE PHOTO – The company logo of Xerox is displayed in a screen on the New York Stock Exchange floor (NYSE) in New York, U.S.A, March 11, 2019. REUTERS/Brendan McDermid

(Stocksak: Xerox (NASDAQ):) Holdings Inc’s shares fell 25% to their lowest level in 13 years on Tuesday, as the photocopy maker slashed annual revenue and cash flow forecasts. It blamed a stronger dollar and a slower than expected recovery in global supply chain.

The hybrid work environment has increased the pressures on companies already struggling, with consumers and firms switching to digital documents to save time and help the environment.

Tuesday’s Xerox 2022 revenue forecast was lowered to between $7 billion-$7.1 billion. This is in contrast to its previous forecast of at minimum $7.1 million. It is due to a weaker pound and euro.

The company’s largest shareholder, activist investor Carl Icahn is its largest shareholder. In fact, the company has cut its annual free-cash flow (FCF), to at least $125m from approximately $400m.

Xerox explained that the reduction is due in part to persistently high inflation and slower than expected supply chain improvements.

Chief Executive Steven Bandrowczak stated that the global macroeconomic outlook had become more somber over three months in a conference call with analysts.

Finance chief Xavier Heiss, however, said he expects quarter-on-quarter improvement in margin on FCF due to price increases to counter higher costs and better supply.

The shares recovered some lost ground and were trading at $13.08 after-hours trading down 18%

According to Refinitiv data, third-quarter revenue of $1.75 Billion was lower than analysts’ estimate of $1.77 Billion.

From 48 cents per shared a year ago, adjusted profit dropped to 19 cents per sen.

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Stocksak Editorial

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