•
Delivers GAAP EPS of 27 cents, adjusted EPS of 32 cents and sequential
increase in operating margin to 9.2%
•
Generates strong cash flow of $878 million in the quarter, $1.6 billion full
-
year
•
Services segment delivers revenue of $2.6 billion and double
-
digit growth in signings in the quarter
•
Document Technology continues to de
liver strong operating margin and remains the industry equipment share
revenue leader
•
Announces annual cash dividend increase of 11% to 31 cents per share
•
Announces full
-
year 2016 guidance of $0.66 to $0.76 in GAAP EPS and $1.10 to $1.20 in adjusted EPS
Xerox
(NYSE: XRX) today announced its fourth
-
quarter financial results,
delivering strong earnings and cash flow as a result of a continuous focus on productivity and business model
opti
mization.
The company recorded fourth
-
quarter 2015 adjusted earnings per share of 32 cents, or GAAP EPS from continuing
operations of 27 cents including the amortization of intangibles.
“We delivered solid performance in the fourth quarter, with earnings
that were above our expectations, as a result of
the progress we are making across both segments in optimizing our operating models,” said
Ursula Burns
, Xerox
chairman an
d chief executive officer.
“In the face of a challenging environment, our
Services
segment drove sequential improvement in margin and
double
-
digit year
-
over
-
year signings growth. Similarly,
Document Technology
was the industry equipment sales
revenue market share leader for the 24th consecutive quarter and, through our continued focus on performance and
productivity, maint
ained its strong margins.”
“Looking forward, we will continue to take actions that deliver value for shareholders and clients. This is reflected in
the plan we announced today to separate into two market leading companies and implement a $2.4 billion stra
tegic
transformation program. We will do what is right to position our company for success through a focus on
transforming our operations and optimizing our structure," Burns added.
Fourth Quarter 2015 Results
Revenues were $4.7 billion in the quarter, d
own 8 percent or 5 percent in constant currency year
-
over
-
year. Annuity
revenue was 83 percent of total revenue.
Fourth
-
quarter operating margin of 9.2 percent was down 1.2 percentage points from the same quarter a year ago.
Gross margin was 31.3 percent
, and selling, administrative and general expenses were 19.0 percent of revenue.
Revenue from the company’s Services segment, which represented 57 percent of total revenue, was $2.6 billion,
down 3 percent or flat in constant currency. Document Technology
revenue was $1.9 billion, down 13 percent or 10
percent in constant currency. Services margin was 9.4 percent. Document Technology margin was 11.8 percent.
Xerox generated $878 million in cash flow from operations during the fourth quarter and ended 2015
with a cash
balance of $1.4 billion
2
Full Year 2015 Results:
•
GAAP EPS from continuing operations of 49 cents, adjusted EPS of 98 cents
•
Total revenue of $18.2 billion*, $10.3 billion from Services*, $7.4 billion from Document Technology
•
Operating margin
of 8.4 percent
•
Operating cash flow of $1.6 billion
•
Net income from continuing operations of $552 million, adjusted net income of $1.1 billion
•
Share repurchase of $1.3 billion, dividend payments of $326 million
* Reported Total and Services revenue was $1
8.0 billion and $10.1 billion, respectively. All full
-
year 2015 results
exclude the impact from the third quarter Health Enterprise settlement charge.
Full Year 2016 Guidance
For full
-
year 2016, Xerox expects GAAP earnings of $0.66 to $0.76 per share.
I
n 2016 the company plans to revise its calculation of adjusted EPS to exclude restructuring, certain retirement
related costs as well as separation and related costs in addition to the amortization of intangibles. Based on this
revised calculation, full
-
year 2016 adjusted EPS guidance is expected to be $1.10 to $1.20 per share. On a
comparable basis, full
-
year 2015 adjusted EPS would have been $1.07 per share.
Xerox expects to generate operating cash flow of $1.3 to $1.5 billion and free cash flow of $1.0
to $1.2 billion in
2016.
For the first quarter of 2016, Xerox expects GAAP earnings of 5 to 8 cents per share and adjusted EPS of 21 to 24
cents per share
Dividend Declaration and Planned Increase
Today, the company announced that its board of directo
rs has declared an 11 percent increase in the company’s
quarterly cash dividend to 7.75 cents per share on Xerox common stock. The dividend is payable on April 29, 2016
to shareholders of record on March 31, 2016.
The board also declared a quarterly cash
dividend of $20 per share on Xerox Series A Convertible Perpetual
Preferred Stock. The dividend is payable on April 1, 2016 to shareholders of record on March 15, 2016.
In 2016, Xerox will continue its practice of returning value to shareholders. It expec
ts to use more than 50 percent of
its free cash flow for share repurchases and dividends.
www.xerox.com
