Xerox Corporation announced today fourth-quarter 2009 results that include GAAP earnings per share of 20 cents, adjusted earnings per share of 25 cents and $967 million in operating cash flow. The adjusted EPS excludes a previously disclosed charge for acquisition-related costs of 5 cents per share.
"We delivered a strong close to a difficult year, with solid operational results that reflect our disciplined approach to generating cash and reducing costs," said Ursula Burns, Xerox chief executive officer.
"During the fourth quarter, we saw signs of improvement in several areas including developing markets, and we remain quite confident in our strong global competitive position," she added. "However, we believe revenue will continue to be under pressure until there is a more sustainable economic recovery. To help offset this challenge, we remain focused on cost and expense management and sizing our business to better match current revenue levels."
The company reported fourth-quarter total revenue of $4.2 billion, down 3 percent from fourth-quarter 2008 including a 4 point benefit from currency. Equipment sale revenue declined 11 percent or 15 percent in constant currency. Post-sale and financing revenue was flat, or declined 4 percent in constant currency.
"We're encouraged by improving trends in our post-sale revenue and continued strong signings for Xerox's managed print services that help our clients reduce their document costs," said Burns. "The increasing demand for services supports the benefits of our acquisition of Affiliated Computer Services. We're on track to close the acquisition next month. Once completed, Xerox will be the world leader in business process and document management."
Gross margin was 39.9 percent in the fourth quarter, an increase of two points from the prior year. Selling, administrative and general expenses were up year over year by $23 million driven by currency, and SAG as a percent of revenue was 26.7 percent in the fourth quarter.
The company's full-year 2009 net income was $485 million, including after-tax acquisition-related costs of $49 million. Total revenue was $15.2 billion, down from $17.6 billion in 2008.
Xerox generated $2.2 billion of operating cash flow in 2009, exceeding its full-year expectations by $500 million. Total debt was reduced by $1.1 billion in 2009, excluding the $2 billion of ACS-related notes issued last month. The company ended the year with a cash balance of $3.8 billion.
During the first quarter of 2010, Xerox expects to take a pre-tax restructuring charge of approximately $250 million to continue implementing its cost-reduction activities on a global basis. Including ACS results, Xerox expects full-year 2010 GAAP earnings in the range of 36 to 46 cents per share. Adjusted EPS is expected to be 75 to 85 cents per share, which excludes restructuring, adjustments related to the ACS acquisition and other discrete items.
