Xerox Corporation (XRX – Analyst Report) reported net loss from continuing operations of $31 million or loss of 4 cents per share in third-quarter 2015 compared with net income from continuing operations of $258 million or 21 cents per share in the year-ago quarter. The year-over-year decrease in GAAP earnings was primarily due to lower revenues and charges.
Excluding the non-recurring items, adjusted earnings (from continuing operations) for the reported quarter were $258 million or 24 cents per share versus $306 million or 26 cents per share in the year-earlier quarter. Adjusted earnings for the reported quarter beat the Zacks Consensus Estimate by 2 cents.
Total revenue in the reported quarter stood at $4,333 million versus $4795 million in the year-ago quarter. The reported revenues missed the Zacks Consensus Estimate of $4,540 million. The year-over-year decrease in revenues was attributable to decline in revenues in all segments and adverse currency exchange rates.
Operating margin for the reported quarter was down 0.9% year over year to 8.7%, while gross margin fell by 9.4% to 22.8%. The decrease in operating margin was owing to by lower services margin driven by resource and other investments.
Segment Performance
Revenues from the Services segment, which include Document Outsourcing (DO) and Business Process Outsourcing (BPO) decreased 8% year over year to $2,416 million in the reported quarter. BPO revenues fell 10% to $1,616 million due to adverse currency exchange rates. Revenues from DO decreased 3% year over year to $800 million as growth in the partner print services offerings was offset by continued declines in developing markets.
Third quarter 2015 Services segment margin stood at (7.6%). Total contract value of service signings aggregated $1.9 billion with BPO and DO accounting for $1.3 billion and $582 million, respectively. Signings decreased 7% year over year.
Revenues in the Document Technology segment dipped 12% year over year to $1,778 million due to negative currency impact. Segment margin fell 1.2% year over year to 12.8%. The revenue mix for the segment comprised 58% mid-range, 23% high-end and 19% for entry-level products.
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