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Bond Market News
Xerox Bonds Drop on Weak Earnings and Lowered Guidance
October 30, 2024
Xerox’s bonds dropped by 2-4 points across the curve after the company reported weak set of results for 3Q and lowered its earning guidance for the full year FY24. The company reported revenue of $1.5bn, a decline of 7.5% YoY, with a GAAP net loss of $1.2bn. Adjusted net income fell to $34mn, while adjusted operating margin improved to 5.2%. Operating cash flow was $116mn, slightly down from the previous year, and free cash flow was $107mn. The company also lowered its 2024 revenue guidance to a decline of around 10% in constant currency and adjusted operating margin guidance to about 5.0%. Free cash flow guidance was also reduced to $450-$500mn. This revision reflects lower-than-expected equipment sales and reductions in non-strategic revenue. Xerox’s shares hit a 52 week low of $8.8 after the announcement and its dollar bonds also witnessed a drop as seen in the chart above.
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