Service segment driving growth
Xerox Corporation (NYSE:XRX) generated 55% of its total revenue from its service segment, and in the first quarter of 2013, the total revenue was $2.9 billion. The company provides services like business process outsourcing, IT outsourcing, and document outsourcing. There is increase in the BPO and ITO service segment, as the combined purchase order renewal rate reached 89%, in the first quarter of 2013.
“Renewal rate” is the annual recurring revenue on purchase orders that have been renewed. Xerox Corporation (NYSE:XRX) is also signing new contracts, where it anticipates it will gain momentum in the middle of 2013. The company expects to receive free cash flow, or FCF, of $1.6 billion to $1.9 billion in 2013.
Xerox Corporation (NYSE:XRX) declared that it has acquired Impika, which produces aqueous, or water-based, inkjet printers. After the acquisition, Xerox Corporation (NYSE:XRX) launched an innovative printer, ‘‘Xerox CiPress Production Inkjet Systems’,’ which, globally, is the only high-speed, waterless inkjet press. It is expected that inkjet’s demand will increase 21% every year until 2015. It has invented a multi-purpose printer,”Xerox Colour 8250” which has a high-speed capacity to provide impressions of 800,000 – 4 million per month with bright colors.
Xerox Corporation (NYSE:XRX) Colour 8250 is available in the U.S. market and will be launched on July 1, 2013 in the international markets. With its launch in the international market, the company expects an increase in demand, as the demand for these printers are expected to rise annually by 25% through 2016.
Bottom line
Groupon Inc (NASDAQ:GRPN) has increased its focus on mobile users with the acquisition. It has also improved its strategies in the international market, as there is a huge active client base which will drive its earnings higher.
To enhance the mobile subscribers’ experience, JDS Uniphase Corp (NASDAQ:JDSU) has acquired Arieso. The company, with its better services, is trying to increase its market share in the CommTest segment. There is a huge scope for JDS Uniphase Corp (NASDAQ:JDSU) to increase its revenue in the future.
Talking about Xerox Corporation (NYSE:XRX), it is generating good revenue from its service segment and also has plans to increase renewal rate. With the acquisition of Impika and new product development, the company expects an uptrend in demand.
With the growth strategies and expected the rise in the revenue of the companies, it is expected that these companies will show improved EPS too.
Thus, I recommend buying all these three stocks.
The article 3 Promising Opportunities Which You Shouldn’t Miss originally appeared on Fool.com and is written by Madhu Dube.
Madhu Dube has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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