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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.
“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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