The Xerox Corp.'s second-quarter earnings report slightly edging analysts' expectations.
Highlights include total revenue of $5.3 billion, down 2 percent from same quarter last year; Services revenue of $3.0 billion, representing 57 percent of total revenue and up 2 percent year-over-year; cash flow from operations of $325 million; a share repurchase of $204 million; and an adjusted earnings per share of 27 cents.
The earnings per share (EPS) of 27 cents came in above analysts' expectations, which averaged an EPS of 26 cents.
Net income, however, fell to $266 million from $271 million year-over-year.
Revenue from the company's Document Technology business, representing 40 percent of total revenue, was $2.1 billion. That number represents a 7 percent downturn in constant currency valuation.
The Norwalk, Conn.-based company also spent $227 million on acquisitions in the quarter and a total of $281 million in the first half of 2014, having a positive impact on its Services portfolio.
"The second quarter demonstrates progress in executing on our strategy. In our Services business, revenue growth and margin are trending well in commercial services, document outsourcing and internationally. Services segment margin improvement was muted by continued pressure in our government healthcare business including unplanned impairment charges. Our Document Technology business continues to deliver strong profitability through a disciplined and effective approach to operations," said Ursula Burns, Xerox chairman and CEO. "As we enter the second half of the year, we are focused on improving on our progress and capitalizing on opportunities that will shape the success of our business."
Xerox shares have increased 67 cents (5.5 percent) to $12.84 since January, compared with the Standard & Poor 500 Index, which grew by 7.6 percent. Year-over-year, Xerox stock has grown by 31 percent, an increase of $3.04.
The second-quarter operating margin improved by 0.3 points year-over-year with a dollar amount of $514 million in operating profit. Gross margin was 30.8 percent, and aggregate expenses represented 18.4 percent of revenue.
"Our business continues to deliver strong cash flow that gives us flexibility to invest in growth, build shareholder value now and in the future, and positions us well to deliver on our expectations," said Burns.
Expectations going forward include GAAP EPS to arrive at 21-23 cents per share, with a third-quarter adjusted EPS of 25-27 cents. For the full year, the company projects an adjusted EPS of $1.09-$1.13.
Xerox has over 140,000 employees and has a business presence in more than 180 countries, providing business services and printing equipment.
