When I initiated coverage on Xerox (NYSE:XRX), I concluded that the stock wasn't dead. This once-stellar blue chip has certainly fallen from grace, big time. I mean, it has been struggling for a long time. I suggested on nice dips you could buy simply for the yield and collect the dividend, but growth was nowhere to be found. I had said in my prior work numerous times that we needed to see some improvement in the underlying metrics before I could get behind the name. Well, in the past three months, the stock has moved sideways to higher, and the completion of the split of Conduent is now complete. The newly created company is essentially Xerox's former business process services segment. Conduent will operate in three segments, healthcare, public sector services and commercial industries, with commercial industries making up nearly half of revenues. The newly leaner Xerox is focusing on the document technology side of things. This move was a value creator. But will there be sustained momentum in Xerox? That is tough to tell, but let's check in on the name to see where we are at.
The truth is that performance has been pitiful of late and is the reason shares had declined quarter after quarter. Well here in Q4 we still see declining revenues. Revenue as a whole came in at $2.73 billion, and this missed estimates by $40 million. However, this was also down 7.5% year over year, continuing a string of declining quarters. In addition, the degree of declining revenues seems to be picking up. However, as I have discussed in-depth in other articles, the strong dollar has hurt companies with international businesses.
