) reported net income (from continuing operations) of $310
million or 25 cents per share in the fourth quarter of 2013
compared with $334 million or 26 cents a share in the year-ago
quarter. Excluding non-recurring items, adjusted earnings for the
reported quarter were $361 million or 29 cents per share versus
$385 million or 30 cents per share in the year-earlier quarter.
The adjusted earnings for the reported quarter were in line with
the Zacks Consensus Estimate.
The year-over decrease in earnings was primarily attributable to
decline in revenues, which decreased 3% year over year to $5,569
million. Quarterly revenues also missed the Zacks Consensus
Estimate of $5,645 million.
For full year 2013, net income (from continuing operations) was
$1,185 million or 93 cents per share compared with $1,184 million
or 87 cents a share in 2012. Excluding non-recurring items,
adjusted earnings for 2013 were $1,390 million or $1.09 per share
versus $1,387 million or $1.02 per share in 2012. Revenues for
full year 2013 dipped to $21,435 million from $21,737 million in
the previous year.
Revenues from the
segment, which include Document Outsourcing (DO), Business
Process Outsourcing (BPO) and Information Technology Outsourcing
(ITO), remained relatively flat at $3,039 million in the reported
quarter (55% of total revenue). While revenues from DO and ITO
increased year over year, BPO revenues declined due to lower
volumes in customer care business.
Segment margin decreased 1.6% year over year to 9.6% largely due
to the impact of price declines, higher healthcare platform
expenses and the run-off of the student loan business. Total
Services sales pipeline grew 9% year over year. Total contract
value of deal signings aggregated $3.0 billion with BPO, DO and
ITO accounting for $1.8 billion, $870 million and $320 million,
Revenues in the
segment dipped 6% year over year to $2,351 million (42% of total
revenue) due to a fall in equipment sales and annuity revenues.
Segment margin decreased 0.6% year over year in the reported
quarter to 11.7% owing to price declines and unfavorable changes
in revenue mix.
Revenues in the
segment went down 16% to $179 million (3% of total revenue).
Lower revenues in its wide format business and lower paper sales
within developing markets resulted in the decline.
Xerox had cash and cash equivalents of $1,764 million at year-end
2013, compared with $1,246 million in the year-ago period.
Long-term debt at year-end stood at $6,904 million versus $7,447
million as of Dec 31, 2012.
Net cash provided by operating activities in the reported quarter
were $968 million versus $1,773 million in the year-ago period.
Xerox generated $2,375 million of cash flow from operations in
2013 compared with $2,580 million in 2012. The company
repurchased $524 million worth of shares in the reported quarter
and approximately $700 million during the year. Xerox increased
the quarterly cash dividend by 8.7% to 6.25 cents per share,
beginning with the dividend payable on Apr 30, 2014.
For first quarter 2014, Xerox expects GAAP earnings between 19
cents and 21 cents per share, while adjusted earnings are
expected to be within 23 cents to 25 cents.
For full year 2014, Xerox reiterated GAAP earnings guidance in
the range of 93 cents to 99 cents and adjusted earnings between
$1.10 and $1.16. The company expects operating cash flow to range
from $1.8 billion to $2.0 billion in 2014.
Investor sentiments were down with lackluster fourth quarter and
full year 2013 results as share prices fell in pre-market trading
post the earnings release. Moving forward, Xerox expects to
realign its business model to better adapt to the evolving market
trends by expanding indirect distribution channel and
streamlining its supply chain and product portfolio.
Xerox also intends to focus more on vertical markets like
healthcare. In addition, it is integrating its market-leading
Managed Print Services (MPS) with business process and IT
outsourcing capabilities and continuing its thrust for leadership
in Document Technology.
HIMAX TECH-ADR (HIMX): Free Stock Analysis
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XEROX CORP (XRX): Free Stock Analysis Report
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Xerox currently has a Zacks Rank #3 (Hold). Other stocks that
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