Xerox Corp. (NYSE: XRX) reported Q1 EPS of $0.22, $0.01 worse than the analyst estimate of $0.23. Revenue for the quarter came in at $4.3 billion versus the consensus estimate of $4.24 billion.

Separation and Strategic Transformation Update

On January 29, 2016, Xerox announced a plan to separate into two independent, publicly-traded companies, each of which will be a leader in its respective industry. Xerox intends to make its initial Form 10 registration statement filing with the Securities and Exchange Commission in July 2016, on track to complete the separation by year-end. The company has determined that the optimal transaction structure for the separation is a tax-free spinoff of its BPO business. Xerox expects to incur one-time separation costs of approximately $200 to $250 million in 2016, inclusive of $8 million incurred in the first quarter. This amount does not include potential tax cost related to the separation, some of which may be offset by foreign tax credits.

In conjunction with the separation, Xerox is implementing a three-year strategic transformation program to deliver significant productivity gains and cost reductions across its businesses. It expects to realize approximately $700 million in annualized savings in 2016 from ongoing and incremental initiatives. The company recorded $126 million of restructuring and related costs in the first quarter related to the program and anticipates total restructuring and related costs of $300 million for the full year.

GUIDANCE:

Xerox Corp. reaffirmed FY2016 guidance.

The company sees Q2 EPS of $0.24 - $0.26, with the consensus at $0.26.

For earnings history and earnings-related data on Xerox Corp. (XRX) click here.