Click here to review Xerox’s reported earnings
- Sales and revenue down slightly
- Equipment Sales Revenue Up 1% from 2012
NORWALK, Conn., Oct. 24, 2013 – Xerox (NYSE: XRX) announced today third- quarter 2013 adjusted EPS of 26 cents, which excludes 4 cents related to the amortization of intangibles, resulting in GAAP EPS from continuing operations of 22 cents.
In the third quarter, total revenue of $5.3 billion was flat from the prior year or down 1 percent in constant currency.
Revenue from the company’s services business was up 3 percent with a segment margin of 9.9 percent. Services revenue now represents 56 percent of Xerox’s total revenue. The 
company’s document technology revenue declined 4 percent, or 5 percent in constant currency, with a segment margin of 12.1 percent.
“This quarter shows how we are successfully capturing the benefits of a diversified portfolio. Within services we continue to focus on improving our cost structure while maintaining investments in areas where we see opportunity, such as healthcare. In document technology, revenue declines stabilized with continued good profitability. We continue to see demand from small and midsize businesses in the United States, and positive trends in the high end of our business,” said Ursula Burns, Xerox chairman and chief executive officer. “Our approach remains the same: to focus on areas of differentiation and profitable growth while finding new ways to deliver operational improvements across the board.”
Third-quarter operating margin of 9.4 percent was up 0.5 points year over year. Gross margin was 31.5 percent. Selling, administrative and general expenses were 19.3 percent of revenue.
The company generated $961 million in operating cash flow in the quarter, and anticipates full year cash flow towards the higher-end of the $2.1 billion to $2.4 billion range.
Xerox expects fourth quarter 2013 GAAP earnings from continuing operations of 24 to 26 cents per share and adjusted EPS of 28 to 30 cents. Our guidance includes approximately 2 cents per share of restructuring charges and 2 cents from higher pension settlement expenses.
The company expects full-year 2013 GAAP EPS from continuing operations in the range of 93 to 95 cents, and adjusted EPS of $1.08 to $1.10.
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 third-quarter 2013 as well as
for the fourth-quarter and full-year 2013 guidance that excludes certain
items.
- Operating margin for the third-quarter 2013 that excludes certain
expenses.
- Constant Currency revenue growth for the third quarter 2013 that
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.
Forward-Looking Statements
This release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements reflect management’s current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially. These factors include but are not limited to: changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters in the United States and in the foreign countries in which we do business; changes in foreign currency exchange rates; actions of competitors; our ability to obtain adequate pricing for our products and services and to maintain and improve cost efficiency of operations, including savings from restructuring actions; the risk that unexpected costs will be incurred; the risk that subcontractors, software vendors and utility and network providers will not perform in a timely, quality manner; our ability to recover capital investments; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term; the risk that our Services business could be adversely affected if we are unsuccessful in managing the ramp-up of new contracts; development of new products and services; our ability to protect our
intellectual property rights; our ability to expand equipment placements; the risk that individually identifiable information of customers, clients and employees could be inadvertently disclosed or disclosed as a result of a breach of our security; interest rates, cost of borrowing and access to credit markets; reliance on third parties for manufacturing of products and provision of services; our ability to drive the expanded use of color in printing and copying; the outcome of litigation and regulatory proceedings to which we may be a party; and other factors that are set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other sections of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 and our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The Company assumes no obligation to update any forward- looking statements as a result of new information or future events or developments, except as required by law.
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Media Contacts:
Ken Ericson, Xerox, +1-202-520-2388, kenneth.ericson@xerox.com Karen Arena, Xerox, +1-732-407-8510, karen.arena@xerox.com
Investor Contacts:
Jennifer Horsley, Xerox, +1-203-849-2656, jennifer.horsley@xerox.com Joe Ketchum, Xerox, +1-203-849-2672, joseph.ketchum@xerox.com
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