NORWALK, Conn., Jan. 31, 2017 - Xerox (NYSE: XRX) today announced its fourth-quarter 2016 financial results from continuing operations.

“Our fourth quarter results demonstrate that we are realizing significant benefits from our Strategic Transformation program,” said Jeff Jacobson, Xerox chief executive officer. “We delivered strong margins that countered expected pressure on revenue.”

Jacobson continued, “With the separation of Conduent now complete, we turn our full attention to delivering on our strategy, which includes pursuing the growing areas of the market. As the strategy begins to yield results, our revenue trajectory is expected to improve over time while we expand our margins and continue to generate strong cash flows.” 

Fourth Quarter 2016 Results

The company delivered fourth-quarter 2016 GAAP EPS from continuing operations of 17 cents and adjusted earnings per share of 25 cents, which excludes 8 cents per share of after-tax costs related to the amortization of intangibles, restructuring and related costs, and certain retirement related costs.

Revenues were $2.7 billion in the quarter, down 7.2 percent or 5.0 percent in constant currency. Annuity revenue was 75 percent of total revenue.

Fourth-quarter adjusted operating margin of 14.0 percent was up 0.7 percentage points from the same quarter a year ago. Gross margin was 40.0 percent, and selling, administrative and general expenses were 23.4 percent of revenue.

Xerox generated $462 million in cash flow from continuing operations during the fourth quarter and ended 2016 with a cash balance of $2.2 billion, which includes $1.0 billion of cash expected to be used for the repayment of maturing Senior Notes in the first quarter 2017.

Full Year 2016 Results

• GAAP EPS from continuing operations of 58 cents, adjusted EPS of 88 cents

• Total revenue of $10.8 billion

• Adjusted operating margin of 12.5 percent

• Operating cash flow from continuing operations of $1,018 million

Full Year 2017 Guidance

For full-year 2017, Xerox expects GAAP earnings from continuing operations of 44 to 52 cents per share; adjusted EPS is expected to be 80 to 88 cents per share.

Xerox expects to generate operating cash flow from continuing operations of $700 to $900 million and free cash flow from continuing operations of $525 to $725 million in 2017.