Xerox Posts 4th-Quarter Earnings, Beats Expectations
January 21, 2010 - Xerox reported its fourth-quarter 2009 results that include earnings per share of 20 cents, beating analyst expectations, and fourth-quarter net income of $180 million. The company’s full-year 2009 net income was $485 million, including after-tax acquisition-related costs of $49 million. Total 2009 revenue was $15.2 billion, down from $17.6 billion in 2008.
Xerox's fourth-quarter revenue was $4.2 billion, down 3 percent from fourth-quarter 2008, including a 4 point benefit from currency. Equipment-sale revenue declined 11 percent or 15 percent in constant currency. Post-sale and financing revenue was flat, or declined 4 percent in constant currency.
Xerox CEO Ursula Burns noted, "We delivered a strong close to a difficult year, with solid operational results that reflect our disciplined approach to generating cash and reducing costs. During the fourth quarter, we saw signs of improvement in several areas, including developing markets, and we remain quite confident in our strong global competitive position. However, we believe revenue will continue to be under pressure until there is a more sustainable economic recovery. To help offset this challenge, we remain focused on cost and expense management, and sizing our business to better match current revenue levels.”
Burns continued, “We're encouraged by improving trends in our post-sale revenue and continued strong signings for Xerox’s managed print services that help our clients reduce their document costs." Burns also noted that Xerox is on track to complete its acquisition of Affiliated Computer Services next month.
Gross margin was 39.9 percent in the fourth quarter, an increase of two points from the prior year. Selling, administrative and general expenses (SAG) were up year-over-year by $23 million driven by currency, and SAG as a percentage of revenue was 26.7 percent in the fourth quarter.