Xerox Q4 revenue, earnings down, plans business segment restructuring

Xerox Holdings Corp. on Tuesday reported a more than 20 percent year-over-year decline in revenue and a 60 percent decline in earnings for the fourth quarter.

For the quarter ended Dec. 31, 2020, Xerox reported revenue of $1.93 billion, down roughly 21 percent from $2.44 billion in the year-ago quarter. Net income for the quarter was $77 million, compared with $818 million in the fourth quarter of 2019. On a per-share basis, diluted earnings were 36 cents for the quarter, down from $3.61 per share in the same quarter a year ago.

Analysts had expected GAAP earnings of 42 cents on revenue of $1.63 billion.

John Visentin
John Visentin

“Times of adversity require working in unison, and I couldn’t be prouder of the way our team came together. We put our strategy to the test in 2020, delivering positive earnings per share and free cash flow, while returning capital to shareholders and continuing to invest in our future. The team’s discipline allowed us to turn on a dime, tightly controlling expenses while steadfastly supporting clients,” said Xerox Vice Chairman and CEO John Visentin. “Though the impact of the pandemic continues in 2021, we expect to return to growth this year as we increase the breadth of offerings and reach new customers in existing and new businesses.”

Xerox reported $235 million of operating cash flow from continuing operations in the fourth quarter, up $129 million from the previous quarter, but down $163 million year-over-year.

For the full year, the document company reported revenue of $7.02 billion, down more than 22 percent from $9.07 billion in 2019. Earnings for the full year were 84 cents per share, down 70 percent from $2.78 per share in 2019.

Xerox said it plans to separate its Software, Financing and Innovation organizations into separate and distinct businesses by 2022.

• The Software business will include a growing portfolio comprised of: DocuShare, a cloud-based content management system; XMPie, software that supports multichannel marketing campaigns; and CareAR, an augmented reality business Xerox acquired in late 2020. CareAR has signed agreements with a number of major companies.
• Xerox Financial Services (XFS) will become a global payment solutions business, offering leasing for Xerox and third-party technology and office equipment. This will expand the company’s customer base, create cross-selling opportunities and provide more leasing options for small and medium-sized businesses.
• The Palo Alto Research Center (PARC) has been central in advancing the company’s innovation portfolio including 3D Printing and Digital Manufacturing, IoT Sensors and Services and Clean Technology. Xerox installed its first 3D printer for a client in December, and IoT solutions are at work with the U.S. Defense Advanced Research Projects Agency and other clients.

In the coming months, officials said Xerox will establish a $250 million corporate venture capital fund to invest in start-ups and early and mid-stage growth companies aligned with the company’s innovation pillars and targeted adjacencies. The corporate venture capital fund will further enhance the company’s existing innovation ecosystem and drive growth through investment, commercial partnerships and co-development of new technologies, officials said.

Xerox on Tuesday also offered 2021 guidance of $7.2 billion in full-year revenue, or roughly 2.5 percent growth, as well as operating cash flow of $600 million or more and free cash flow of $500 million or more.

Shares of company stock (NYSE: XRX) were trading down nearly 2 percent mid-morning Tuesday at $20.39.

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Luminate to join Upstate Capital Association at Wednesday showcase

The Upstate Capital Association of New York on Wednesday will host the Venture NY Series A Showcase in partnership with 43North, GENIUS NY, 76West, Grow-NY and Luminate.

The event will feature some of the fastest-growing startups from across New York and will include investor pitches and opportunities for group and one-to-one networking. Venture NY will take place in conjunction with Upstate Capital’s Annual Awards Celebration, which highlights Upstate New York’s most exciting activity in private equity and mergers and acquisitions, as well as Venture + Growth Investments in 2020, officials said.

A Lifetime Achievement Award will be bestowed on a person who has made a significant impact in the Upstate New York investment community over the course of their career.

“Attracting venture capital from outside the region has been part of Upstate Capital’s mission since 2003 when the organization was founded. This is an amazing opportunity to collaborate with several pillars of the broader regional entrepreneurial ecosystem and highlight how far Upstate New York has come in developing entrepreneurship and high-growth businesses here,” said Upstate Capital Executive Director Noa Simons.

The partnership, with multiple accelerators and competitions, is the first collaboration of its kind in New York.

Each of the five organizations featured at the event will invite their top startups. Based in Rochester, Luminate is the world’s largest business accelerator for optics, photonics and imaging (OPI) startups. The accelerator brings entrepreneurs from around the world together with OPI pioneers and qualified investors to speed innovation and time to market and help early-stage startups gain clear competitive advantages.

[email protected] / 585-653-4021
Follow Velvet Spicer on Twitter: @Velvet_Spicer