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Xerox Q2 revenue up 22% amid concern over COVID variants

Xerox posted $US1.79 billion of revenue in 2021 second-quarter results, up 22.4 percent year-over-year, but said recovery may be “uneven and affected by the emergence of new variants of the COVID-19 virus.” The board declared a quarterly dividend of 25c per share.

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“Increased equipment sales and print
  volumes": Xerox CEO John Visentin

“We saw growing demand for our products and services in the second quarter,” said Xerox CEO John Visentin. “Increased equipment sales and print volumes in many regions are consistent with a continuing, gradual return to the office and give us confidence to reaffirm our revenue and cash flow guidance for the year.

“Over the past 18 months, our team has successfully managed through an unprecedented level of uncertainty to continue delivering value to our clients. This focus will continue in the second half of the year as we manage through global supply chain disruption while investing for sustainable, long-term growth.”

In a statement, Xerox added:  “We saw a continued gradual recovery of our revenues in the quarter as businesses gained confidence in the control of the pandemic and as a result invested in new printing technology and services. We continued to see a positive correlation between the roll-out of vaccinations, the return of employees to the office, and the gradual recovery of our page-volume driven post sale revenues. 

“We expect that measures to control the pandemic and expand economic activity will result in a moderate economic improvement in 2021. However, in the near term, the recovery may be uneven and affected by the emergence of new variants of the COVID-19 virus which could result in a resurgence of cases in various countries and regions.

“We have a strong balance sheet and sufficient liquidity, including approximately $2.1 billion of cash and cash equivalents and access to our undrawn $1.8 billion revolver. 

“In addition, in response to the COVID-19 pandemic, various governments continue to employ temporary measures to provide aid and economic stimulus directly to companies through cash grants and credits or indirectly through payments to temporarily furloughed employees. During second quarter 2021, we recognized savings of approximately $10 million from the use of such measures in the U.S., Canada and Europe. We continue to monitor government programs and actions being implemented or expected to be implemented to counter the economic impacts of the COVID-19 pandemic.”

Financial Summary

  • •$1.79 billion of revenue, up 22.4 percent year-over-year or 18.1 percent in constant currency.
  • •GAAP earnings per share (EPS) of $0.46, up $0.35 year-over-year, and adjusted EPS of $0.47, up $0.32 year-over-year.
  • •Adjusted operating margin of 7.0 percent, up 280 basis points year-over-year.
  • •$214 million of operating cash flow, up $180 million year-over-year.
  • •$198 million of free cash flow, up $183 million year-over-year.

Xerox Holdings Corporation (NYSE: XRX) announced a quarterly dividend of $0.25 per share on Xerox Holdings Corporation Common Stock.