Xerox releases fourth-quarter and full-year results

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Xerox Inc., Norwalk, Conn., reported declining sales for the fourth quarter and full year 2023. For the fourth quarter of 2023, revenue was $1.77 billion, down 9.1 percent year-over-year or down 10.6 percent in constant currency, along with a GAAP net loss of $(58) million, or $(0.50) per share, down $179 million or $1.24 per share, year-over-year, respectively.

For the full year of 2023, revenue was $6.89 billion, down 3.1 percent year-over-year, or down 3.3 percent in constant currency, with GAAP net income of $1 million, or $(0.09) per share, up $323 million or $2.06 per share, year-over-year, respectively. 2023 includes a Q4 after-tax Restructuring and related costs, net charge of $78 million, or $0.62 per share, related to the recently announced workforce reduction. 2022 includes an after-tax non-cash goodwill impairment charge of $395 million, or $2.54 per share.

“Last year, steps we took to structurally simplify our business impacted revenue but led to 170 basis points of adjusted operating margin expansion and laid the foundation for successful execution of our Reinvention,” said Steve Bandrowczak, chief executive officer at Xerox. “As we enter 2024, we are focused on stabilizing and strengthening our core Print business, driving enterprise-wide efficiency and productivity gains through our new Global Business Services organization, and further capturing opportunities in Digital and IT Services. We expect balanced execution on these priorities, supported by our new operating model, will yield significant progress towards our three-year adjusted operating income improvement target of $300 million above 2023 levels.”

The company expects stable Print demand, growth in Digital and IT Services, and neutral macroeconomic conditions. The guided year-over-year decline in revenue is attributable to the following: around 200 basis points of headwind from prior-year backlog reduction and around 200 basis points from the deemphasis of certain non-strategic revenue, including lower sales of paper. Margin guidance implies adjusted operating income margin improvement of more than 190 basis points, and adjusted operating income improvement of more than $100 million, year-over-year. The company reiterates its three-year target of $300 million of incremental adjusted operating income above 2023 levels and a return to double-digit adjusted operating income margin by 2026.