Xerox Holdings Corporation has announced that it is withdrawing its 2020 financial guidance as a result of the economic uncertainty caused by the COVID-19 pandemic.
“The company is withdrawing its 2020 financial guidance for revenue, adjusted operating margin, EPS and free cash flow due to the high level of economic uncertainty and disruption caused by COVID-19,” it said, in a statement.
The company’s vice-chairman and CEO John Visentin said during this unprecedented time, the business’ sole commitment is to protect its employees, customers, partners and society.
“We all have a critical role to play battling the COVID-19 pandemic,” he said.
“While Xerox saw an immediate impact to our business due to the rapid implementation of lockdown measures globally, the disciplined approach we implemented over the last two years provided a foundation to move quickly to preserve cash, continue operations, provide support to our many clients on the frontlines, and apply our manufacturing and R&D expertise to help save lives.
“I’m incredibly proud of the Xerox team’s dedication and ingenuity during this extraordinary time.”
The company also announced its first-quarter 2020 financial results, which saw a YoY decline of US$49 million in operating cash flow to US$173 million. Its free cash flow was reported at US$150 million, US$57 million less than the same period last year.
It reported a revenue of US$1.86 billion, a dip of 14.7 per cent from last year.
Its adjusted operating margin of 4.7 per cent was down 630 basis points YoY.
Xerox also most recently, after a long-standing back and forth with HP, withdrew its tender offer to acquire HP and said it will no longer seek to nominate its slate of highly qualified candidates to HP Inc’s board of directors as a result of market turmoil caused by COVID-19.
“While it is disappointing to take this step, we are prioritising the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations,” the company said previously.
However, Xerox mentioned that it still sees value in a combined business between both companies.
“There remain compelling long-term financial and strategic benefits from combining Xerox and HP. The refusal of HP’s board to meaningfully engage over many months and its continued delay tactics have proven to be a great disservice to HP stockholders, who have shown tremendous support for the transaction,” Xerox said.
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