The OEM stated that its revenues fell 7.2 percent in the fourth quarter.
Xerox Square in Rochester, New York
Xerox stated that its fourth quarter earnings included revenue “from continuing operations” of $2.7 billion (€2.5 billion), which was a 7.2 percent decline, while operating margin was registered at 14 percent – an increase of 0.7 percent – and cash flow at $462 million (€427 million), with annuity revenue “75 percent of total revenue” and “selling, administrative and general expenses” 23.4 percent of revenue.
Total revenue for the whole year meanwhile reached $10.8 billion (€10 billion), while adjusted operating margin was 12.5 percent and operating cash flow $1.018 billion (€942.8 million). The OEM noted that it has exceeded its “first-year savings target” for the Strategic Transformation programme, essentially the spinning off of the Conduent business amid the split. For 2017, the OEM expects operating cash flow between $700 million (€648 million) and $900 million (€833 million).
The OEM announced at the beginning of 2016 that it planned to split into two companies before the end of the year, with the split into Conduent and Xerox – for business process optimisation and hardware respectively, and worth $11 billion (€10.1 billion) and $7 billion (€6.4 billion) respectively. Xerox’ new CEO was revealed to be Jeff Jacobson, while Ashok Vemuri will run Conduent.
Last November, the OEM’s largest shareholder, who attempted to block the split, agreed a settlement in a court case. Darwin Deason had sued Xerox because of the spin-off of its document outsourcing business, as he felt that his shares would lose value after the split. However, during November, the OEM’s board approved the split and said it would take place by 31 December.
The Recycler reported earlier in 2017 that the split had been completed, and Xerox also commented on the formal separation, stating that it is beginning “a new chapter as [a] focused industry leader in digital print technology”.
Jeff Jacobson, CEO of Xerox, commented: “Our fourth quarter results demonstrate that we are realising significant benefits from our Strategic Transformation programme. We delivered strong margins that countered expected pressure on revenue. With the separation of Conduent now complete, we turn our full attention to delivering on our strategy, which includes pursuing the growing areas of the market.
“As the strategy begins to yield results, our revenue trajectory is expected to improve over time while we expand our margins and continue to generate strong cash flows.”