Xerox Holdings Corp (NASDAQ: XRX) reported a fiscal first-quarter 2024 sales decline of 12.4% year-on-year to $1.50 billion, missing the consensus of $1.53 billion.

Revenues declined 13.2% at constant currency. Adjusted EPS of $0.06 missed the analyst consensus of $0.35. The stock price declined after the print.

Equipment sales decreased by 25.8%, while post-sale revenue declined by 8.5%.

Gross margin declined 480 basis points Y/Y to 29.5%. The equipment margin fell by 550 bps to 31.0%. The post-sale margin decreased by 460 bps to 29.1%.

The company reported an adjusted operating income of $33 million, compared to $118 million last year, and the margin declined 470 basis points to 2.2%.

Xerox held $685 million in cash and equivalents as of March 31, 2024. Operating cash flow for the quarter totaled $(79) million, with a free cash flow of $(89) million.

"We implemented comprehensive and strategic operating model changes to align our organization more closely with our buyers' needs and improve efficiency," said Steve Bandrowczak, CEO at Xerox.

FY24 Outlook: The company reiterated revenue of $6.54 billion – $6.68 billion vs. consensus of $6.71 billion. The company projected a free cash flow guidance of at least $600 million.

Xerox maintained an adjusted operating margin outlook of at least 7.5%.

Xerox stock gained 21% in the last 12 months.

Investors can gain exposure to the stock via ProShares Trust ProShares Metaverse ETF (NYSE:VERS) and Direxion Work From Home ETF (NYSE:WFH).

Price Action: XRX shares are trading lower by 10.8% at $14.65 at the last check Tuesday.

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