Blog Coverage: Xerox Announced One-to-Four Reverse Stock Split; Declared Dividend for the First Quarter

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LONDON, UK / ACCESSWIRE / May 26, 2017 / Active Wall St. blog coverage looks at the headline from Xerox Corp. (NYSE: XRX) as the leading technology Company announced on May 23, 2017, that the proposed stock split of Xerox’s common stock at a ratio of one-for-four shares has been approved at a shareholder meeting on the same day. The authorized shares of the Company’s common stock will be restructured from 1.75 billion shares to 437.50 million shares where Xerox will move forward with implementing the reverse stock split and authorized share reduction, and are anticipated to be effective on or about June 14, 2017. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Xerox’s competitors within the Information Technology Services space, Gartner, Inc. (NYSE: IT), reported on May 04, 2017, its financial results for Q1 2017 and also provided an update to its financial outlook for full year 2017, which includes its projections for CEB Inc. (“CEB”), which Gartner acquired on April 5, 2017. AWS will be initiating a research report on Gartner in the coming days.

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Breaking down the Announcement

This reverse stock split comes on the heels of the announcement when the Company’s outsourcing business was renamed Conduent Incorporated following a spin-off, thus leading to the division of Xerox’s market capitalization. The Company, therefore, proposed the reverse stock split in an attempt to increase the per share trading price of Xerox’s common stock which in turn would enhance liquidity and facilitate trading processes.

Once the reverse stock split is effective, Xerox’s common stock will continue to trade, on a split-adjusted basis on the NYSE, where a new CUSIP number (984121608) will be assigned as a result of the reverse stock split. The Company’s common stock dividend and full-year EPS guidance will be adjusted on a proportional basis, subject to the reverse stock split becoming effective as anticipated.

The Company

Xerox currently offers its services and products in about 160 countries. With a strong foundation and a diversified product portfolio, the Company is observing renewed customer responses on document technology market.

On April 25, 2017, Xerox announced its Q1 FY17 earnings, where it reported total revenue of $2.45 billion, down 6.2% y-o-y. Operating cash flow from continuing operations was $190 million for Q1 FY17, advancing $103 million from the same period in FY16.

The Company has been maintaining a strict policy to enhance and expand its presence, particularly in the $20 billion multi-brand reseller space. Pursuant to the strategy, Global Imaging Systems, a Xerox Company, acquired MT Business Technologies on May 15, 2017, which is an Ohio-based multi-brand dealer that provides office equipment, productivity solutions, and managed print services to organizations and firms across Ohio and South Eastern Michigan. Xerox acquired Global Imaging Systems in 2007, and currently, the subsidiary operates under Xerox’s North America Operations. This acquisition offered Xerox a refurbished scale and enabled the Company to exploit new market opportunities in Ohio, including metropolitan areas like Cleveland and Columbus, which offer multiple growth opportunities.

Dividend Update

Xerox announced on May 23, 2017, that its Board of Directors has declared a quarterly cash dividend for Q1 FY17 of 6.25 cents on Xerox’s common stock. The dividend is payable on July 31, 2017, to shareholders of record on June 30, 2017. The dividend will be adjusted on a proportional basis to reflect the one-for-four reverse stock split, approved by Xerox’s shareholders. The proportional adjustment is subject to the case when the reverse stock split becomes effective prior to the dividend payment date. The Company additionally announced a quarterly cash dividend of $20 per share on Xerox’s Series B Convertible Perpetual Preferred Stock. The dividend is payable on July 01, 2017.

Stock Performance

At the closing bell, on Thursday, May 25, 2017, Xerox’s stock was marginally down by 0.43%, ending the trading session at $6.99. A total volume of 3.23 million shares were traded at the end of the day. The Company’s stock price rallied 13.99% in the past six months and 11.48% in the previous twelve months. Moreover, the stock surged 21.57% since the start of the year. Shares of the company have a PE ratio of 12.94 and have a dividend yield of 3.58%. The stock currently has a market cap of $7.10 billion.

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