- GAAP EPS from continuing operations of 25 cents
- Adjusted EPS of 29 cents
- Revenue of $5.6 billion; 55 percent from services
- Cash flow from operations of $1 billion; $2.4 billion for full-year 2013
- Share repurchase of $700 million for full-year 2013
- Quarterly cash dividend increase to 6.25 cents per share
NORWALK, Conn., Jan. 24, 2014 – Xerox (NYSE: XRX) announced today fourth-quarter 2013 adjusted earnings per share of 29 cents. Adjusted EPS excludes 4 cents related to amortization of intangibles, resulting in GAAP EPS from continuing operations of 25 cents.
In the fourth quarter, total revenue of $5.6 billion was down 3 percent or 4 percent in constant currency. Revenue from the company’s services business, which represented 55 percent of total revenue, was $3.0 billion, flat year over year and down 1 percent in constant currency. Revenue from the company’s document technology business, which represented 42 percent of total revenue, was $2.4 billion, down 6 percent.
“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,” said Ursula Burns, Xerox chairman and chief executive officer. “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.”
Fourth-quarter operating margin of 9.3 percent was down 1.3 points. Gross margin was 30.7 percent, and selling, administrative and general expenses were 18.6 percent of revenue.
Xerox generated approximately $1 billion in cash flow from operations during the fourth quarter and $2.4 billion for the year, ending 2013 with a cash balance of $1.8 billion. The company repurchased $524 million of shares in the fourth quarter 2013 and approximately $700 million for the full-year.
Xerox’s board of directors increased the company’s quarterly cash dividend by 8.7 percent to 6.25 cents per share, beginning with the dividend payable on April 30, 2014.
For first-quarter 2014, Xerox expects GAAP earnings of 19 to 21 cents per share and adjusted EPS of 23 to 25 cents per share. The company reiterated its full- year 2014 guidance of GAAP EPS in the range of 93 to 99 cents, and adjusted EPS of $1.10 to $1.16. Xerox expects to generate operating cash flow of $1.8 billion to $2.0 billion in 2014 with no finance receivable sales planned.
Full-year 2013 results include:
- GAAP EPS from continuing operations of 93 cents, adjusted EPS of $1.09
- Total revenue of $21.4 billion; $11.9 billion from services, $8.9 billion from document technology
- Operating margin of 8.9 percent
- Operating cash flow of $2.4 billion
- Net income from continuing operations of $1.2 billion, adjusted net income of $1.4 billion Share repurchase of $700 million
About Xerox
Since the invention of Xerography 75 years ago, the people of Xerox (NYSE: XRX) have helped businesses simplify the way work gets done. Today, we are the global leader in business process and document management, helping organizations of any size be more efficient so they can focus on their real business. Headquartered in Norwalk, Conn., more than 140,000 Xerox employees serve clients in 160 countries, providing business services, printing equipment and software for commercial and government organizations. Learn more at www.xerox.com.
Non- GAAP Measures:
This release refers to the following non-GAAP financial measures:
- Adjusted EPS (earnings per share) for the fourth quarter and full-year 2013as well as for the first quarter and full-year 2014 guidance which excludes the amortization of intangible assets.
- Adjusted net income for the full-year 2013 which excludes the amortization of intangible assets.
- Operating margin for the fourth quarter and full-year 2013 which excludes certain expenses.
Constant Currency revenue growth for the fourth quarter 2013 which excludes the effects of currency translation.
Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measure.