Revenues Slide for Xerox’s Fourth Quarter, Full Year

Xerox – which split into two companies this month, Xerox and Conduent – today reported results for its fourth quarter and full-year 2016. For the fourth quarter, revenue was  $2.7 billion, down 7.2 percent versus the same quarter a year ago. Net income from continuing operations was $181 million, down 29 percent from $256 million a year ago. Fourth-2016 GAAP (Generally Accepted Accounting Principles) earnings per share (EPS) was 17 cents.

Xerox CEO Jeff Jacobson said that with the separation of the company now completed, Xerox’s “revenue trajectory is expected to improve over time.”

Xerox said fourth-quarter revenue from the document-technology segment, the largest contributor to revenues, fell 10 percent versus the same quarter a year ago, while document outsourcing revenue declined of 3.9 percent. Equipment revenue was down 12 percent, and annuity revenue was down 5 percent. Annuity revenue made up 75 percent of total revenue.

Xerox generated $462 million in cash flow from continuing operations during the fourth quarter, and ended 2016 with a cash balance of $2.2 billion.

The firm’s biggest growth segment was high-end copier/MFPs, with installations up 3 percent in fourth quarter 2016 for high-end systems, and up 16 percent year-over year. Mid-range system installations were up 0 percent for the fourth quarter, and up 3 percent year-over-year, while A4 installations were down 8 percent in the fourth quarter, and down 1 percent for the full year.

Document-outsourcing signings were down 18 percent in the fourth quarter and down 5 percent for the full year.

The firm states that it’s targeted growth segments will consist of A4 copier/MFPs, Managed Print Services (MPS), and production printers.

Full-Year 2016 Results

GAAP EPS  was 58 cents, and total revenue was $10.8 billion. Revenue for full-year 2016 totaled $10,771 million, versus $11,465 million for 2015, and $12,679 million for 2014.

Operating profit for 2016 was $1,342 million, versus $1,457 million for 2015, and $1,686 million for 2014.

The firm says it achieved some $550 million in cost savings in 2016, and is aiming to generate some $600 million in savings in 2017 as part of a strategic transformation plan.

Full Year 2017 Forecast

For full-year 2017, Xerox expects GAAP EPS to be 44 to 52 cents per share; Xerox expects to generate operating cash flow of from $700 to $900 million.

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