Revenue, Earnings Down for Xerox’s Fourth Quarter

xerox squareXerox reported results for its fourth quarter, with revenue down year-over-year 4 percent to $5.6 billion, and revenue from its document-technology business down 6 percent to $2.4 billion. Services’ revenue, which made up 55 percent of revenue, remained flat at $3 billion. Earnings per share (EPS) was 25 cents. Cash flow from operations was $1 billion; cash flow for the full year was $2.4 billion.

Net income for the fourth quarter was $ 361 million, versus $ 1,390 million for the same quarter a year ago.

Total revenue for 2013 was $21.4 billion, versus $21,7 billion for 2012. Revenue from services for 2013 was $11.9 billion, while revenue from document technology (printers, copiers, MFPs, supplies, etc.) was $8.9 billion.

Within its services businesses, business-process outsourcing (BPO) revenue decreased 3 percent year-over-year; document outsourcing increased 4 percent year-over-year; and IT outsourcing increased 2 percent year-over-year.

Document Technology Business

Within its document-technology business, although revenue was down 6 percent year-over-year, Xerox reported positive results in the United State, but high-end weakness in developing markets. Overall, there was continued strong growth in installation of color devices. Additionally:

  • Equipment revenue was down 4 percent year-over-year and made up 34 percent of revenue.
  • Annuity revenue was down 6 percent year-over-year and made up 66 percent of revenue. 
  • Equipment revenue consisted of 19 percent entry-level devices, 59 percent mid-range devices, and 22 percent high-end devices.

Within the entry-level equipment business:

  • Installations of A4 monochrome MFPs were down 26 percent year-over-year.
  • Installations of A4 color MFPs were up 1 percent year-over-year.
  • Installations of color printers were up 17 percent year-over-year.

Within the mid-range equipment business:

  • Installations of monochrome MFPs were down 1 percent  year-over-year.
  • Installations of color MFPs were up 11 percent year-over-year.

Within the high-end equipment business:

  • Installations of monochrome systems were up 5 percent year-over-year.
  • Installations of color systems were up 11 percent year-over-year.

Over half of equipment revenue in the fourth quarter was from mid-range equipment.

Xerox Chairman and CEO Ursula Burns commented, “We managed anticipated headwinds while continuing to build our business by investing in growth markets such as healthcare and graphic communications, and expanding Services internationally. Looking ahead, we’re focused on evolving our portfolio and implementing our cost initiatives to improve both revenue and margins.

“Our clients continue to partner with us to take out complexities in their business processes and we’re seeing success in the marketplace. With services signings up 21 percent in the past year and our BPO and ITO renewal rate at 92 percent for the year, we’re well positioned entering 2014.”

For first-quarter 2014, Xerox is forecasting earnings per share of between $0.19 – $0.21. Visit Xerox here for a fourth-quarter earnings presentation.

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