“During the first quarter 2021, our business was still experiencing the impact of the pandemic…however, we saw a gradual recovery of our revenues as businesses gained confidence in the progress to control the pandemic and resumed investments in new printing technology and services,” Xerox said, posting $US1.71bn in revenue for first-quarter 2021, down 8.1% year-on-year.
 |
| (photo courtesy Xerox) |
“In the first quarter, in an environment where many offices remained closed, we grew equipment sales and IT Services revenue year-over-year,” said Xerox vice chairman and CEO John Visentin. “I am proud of how our employees have continued to deliver for our customers during the pandemic. We made progress toward standing up XFS, Xerox Software and PARC Innovation as separate businesses, which we now expect to complete in calendar year 2021.
“With small and medium-sized business and enterprise clients planning to return more employees to the office, our differentiated offerings are well-positioned to serve their growing needs. The strength of our performance, portfolio and strategy gives us confidence we will return Xerox to growth in 2021.”
Impact of COVID-19 on Our Business Operations
In its statement, Xerox said: “During the first quarter 2021, our business was still experiencing the impact of the pandemic, and the recovery in the near-term may be uneven and affected by the emergence of new variants of the virus and the resurgence of elevated COVID-19 cases in various countries and regions.
“However, we saw a gradual recovery of our revenues as businesses gained confidence in the progress to control the pandemic and resumed investments in new printing technology and services, and we saw 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. We also expect to continue our actions to mitigate the effects of the pandemic on our business operations and financial performance, and we have a strong balance sheet and sufficient liquidity, including access to our undrawn $1.8 billion revolver.
“With our Project Own It transformation and cost savings, we have built a leaner and more flexible cost structure, but we also continue to focus our efforts on incremental actions to prioritize and preserve cash as we manage through the pandemic. These actions include the continued reduction of discretionary spend such as near-term targeted marketing programs, the use of contract employees, and the suspension of 401(k) matching contributions. 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 first 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
- $1.71 billion of revenue, down 8.1 percent year-over-year or 10.4 percent in constant currency.
- GAAP earnings per share (EPS) of $0.18, up $0.21 year-over-year, and adjusted EPS of $0.22, up $0.01 year-over-year.
- Adjusted operating margin of 5.2 percent, up 50 basis points year-over-year.
- $117 million of operating cash flow, down $56 million year-over-year.
- $100 million of free cash flow, down $50 million year-over-year
