Will Xerox (XRX) Miss this Earnings Season? - Analyst Blog
April 21 2014 - 4:00PM
Zacks
Information technology services
provider Xerox Corporation (XRX) is scheduled to
report its first quarter 2014 results before the opening bell on
April 22. In the last reported quarter, Xerox’s adjusted earnings
were in line with the Zacks Consensus Estimate. Let’s see how
things are shaping up for this announcement.
Growth Factors in the First Quarter
Xerox expects the Services segment to fetch 66% of total revenues
by 2017, up from 55% in 2013. To achieve this objective, Xerox is
focusing more on vertical markets like healthcare. Xerox recently
entered into a $28 million contract with PatientPoint to implement
PatientPoint technology to help improve healthcare. Additionally,
Xerox Innovation Group announced that a suite of healthcare
research projects conducted in India by Xerox Research Centre India
(XRCI) and Xerox Research Center Webster (XRCW) in New York use
video cameras and data analytics to monitor a patient's
condition.
The company has already begun to reap huge benefits from Medicaid
Management Information System (MMIS) through the successful
implementation and CMS (Centers for Medicare and Medicaid Services)
Certification in all the 31-state Medicaid programs. Also, Xerox is
looking forward to expand its offerings through inorganic measures
to add more clients to its portfolio.
Additionally, a few days back, Xerox-Government and Transportation
Sector Technology delivery Center achieved ISO 9001 quality
management system certification for superior operational
performance and enhanced commitment to customers.
Earnings Whispers
Despite focused attempts to restructure its business, our proven
model does not conclusively show that Xerox is likely to beat
earnings this quarter as it lacks the key ingredients for a success
recipe.
Zero Zacks ESP: Expected Surprise Prediction or ESP, which
represents the difference between the Most Accurate estimate and
the Zacks Consensus Estimate, is at 0.00%. This indicates a likely
in line earnings for the shares.
Zacks Rank #3 (Hold): Xerox’s Zacks Rank #3 reduces the predictive
power of ESP. Note that stocks with Zacks Ranks of #1, #2 and #3
have a significantly higher chance of beating earnings. However,
when combined with 0.00% ESP, the Zacks Rank #3 fails to
conclusively predict an earnings surprise for Xerox. Meanwhile, we
caution against stocks with Zacks #4 and #5 Ranks (Sell rated
stocks) going into the earnings announcement.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows
that these have the right combination of elements to post an
earnings beat this quarter:
Aspen Insurance Holdings Ltd. (AHL), earnings ESP
of +6.12% and Zacks Rank #1 (Strong Buy).
Alaska Air Group, Inc. (ALK), earnings ESP of
+7.14% and Zacks Rank #1 (Strong Buy).
Envision Healthcare Holdings, Inc. (EVHC),
earnings ESP of +5.26% and Zacks Rank #1 (Strong Buy).
ASPEN INS HLDGS (AHL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis Report
ENVISION HLTHCR (EVHC): Free Stock Analysis Report
XEROX CORP (XRX): Free Stock Analysis Report
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